McLaren is willing to give Jenson Button a pay-rise to stop him moving to Ferrari, the Daily Mail reports on Monday.
The 2009 world champion revealed last week that the Woking based team he joined last season "has an option on me for next year".
At the same time Button, 31, said he is reluctant to agree a new long-term deal, despite boss Martin Whitmarsh admitting he would "quickly" ink a new multi-year contract with the former Brawn driver.
The latest twist in the story was a Ferrari source telling the News of the World newspaper that Ferrari has "checked" with Button’s management to see when Button is available as a replacement for Felipe Massa.
Hours after that report was published, the Daily Mail said McLaren is "ready to hand Jenson Button a pay rise".
The newspaper said the British team is taking up the 2012 option on Button "but are so happy with his performances" that in the next few weeks McLaren is "likely to offer him an extended deal on improved terms".