US Edition The three-pronged deal would set up a massive fund to create a "firewall" around the most indebted eurozone countries, allow for an "orderly" Greek default on at least some of its liabilities, and bail out European banks most at risk from debt.
German and French officials came up with the strategy which aims to end the eurozone's sovereign debt crisis before it spirals completely out of control, plunging the world back into recession.
The likely deal came ahead of a major new setback for the British economy - with BAe Systems, Britain's biggest manufacturer, poised to cut 3,000 jobs.
Whitehall officials believe the job losses could be announced as early as this week and are likely to affect the company's military aircraft division in Warton, Lancashire, and Brough, Yorkshire.
The eurozone deal, being brokered by the G20 group of nations, would seek to "ring fence" the crisis around Greece, Portugal and Ireland - preventing it from spreading to major EU economies such as Italy and Spain.
It would involve the bailing out those European banks - mostly French - most at risk from their massive lendings to tottering economies.
Greece, crucially, would be able to default on at least some of its more than £300billion debts but remain inside the eurozone. The Greek government's private creditors would bear most of the increased costs.
At this stage, a new bail-out programme would be devised for Greece - with cash coming at least in part from the International Monetary Fund, in which Britain holds a 4.5 per cent stake.
This could mean British taxpayers paying out more than the £1billion they are already slated to have to contribute under the terms of the first Greek bailout fund.
Britain is not a member of the European Financial Stability Fund (EFSF) - which was set up last year to "preserve financial stability of Europe's monetary union" by providing temporary financial assistance to eurozone countries in difficulty.
Most of the money in the new rescue package would come from the EFSF - limiting Britain's involvement. The fund is currently valued at £350billion, but would need much more cash pumped into it from its members states.
Britain's banks, moreover, are not among the most exposed to Greek debt.
The deal would also use cash to buy up the government bonds issued by Italy and Spain - which are currently going unsold and adding to the peril surrounding the eurozone's third and fourth largest economies.
In total it would amount to euro 2 trillion - £1.75 trillion.
Any agreement, according to experts, would be similar to the proposal made to eurozone nations by Tim Geithner, the US Treasury Secretary, earlier this month.
Germany - the key player in the eurozone - initially rejected the suggestion but is understood to have been sparked into action on a variation of the plan by the recent turmoil on world financial markets.
Last night George Osborne, the Chancellor, attempted to play down suggestions of an imminent deal. He said: "No-one here has put forward a plan for that. Greece has got a programme and needs to implement it."
Last week, Mr Osborne warned the eurozone it has six weeks to fix the crisis or risk world economic meltdown.
He said the situation must be brought under control by November's G20 summit in Cannes, France and added: "Time is running out."
David Cameron, in a speech in Canada last week, criticised eurozone leaders for failing to come up with a solution to the crisis and added that the global economy was close to "staring down the barrel".
It was the Prime Minister's gravest warning yet about the economic outlook. He told European leaders to stop "kicking the can down the road".
Christine Lagarde, the managing director of the International Monetary Fund, has said: "There are dark clouds over Europe and there is huge uncertainty in the US. And with that we could risk a collapse in global demand.
"Let's remove the clouds and remove the uncertainty. Easier said than done, and it requires clearly a collective action."