Plans drawn up by the newspaper industry for a new system of press regulation have been rejected by a committee of senior ministers, it has been reported.
BBC2's Newsnight said that a sub-committee of the Privy Council, set up to examine the industry's proposed royal charter, has come out against it.
In a separate report, the Guardian said coalition ministers were working to prevent Wednesday's meeting of the full Privy Council - which is expected to consider the sub-committee's findings - turning into a final rejection of the industry plan.
The paper said efforts were being made to find a compromise around the industry's proposed charter and the the original charter backed by the three main political parties.
The news that the sub-committee had rejected the industry's plan was greeted with dismay - although little surprise - by one senior figure in the industry.
Trevor Kavanagh, the associate editor of the Sun, told Newsnight: " It is not a shock. It's what we'd been given fairly clear clues would happen. I think it has to be seen as a great victory for the forces of oppression of a free press - Hacked Off in particular - and the politicians who went along for the ride."
Hacked Off, the lobby group which has campaigned for tighter press regulation, welcomed the reports of the sub-committee's decision but expressed concern at the prospect of further delay.
"We are alarmed to hear that the Prime Minister now seems prepared to risk the breakdown of the cross-party agreement by once again delaying the approval of the Leveson royal charter," it said in a statement .
"Ten months after the publication of the Leveson report and seven months after all parties in Parliament endorsed its recommendations in a royal charter, there can be no legitimate excuse for yet another delay."
The industry submitted its proposals after arguing that a royal charter agreed by the parties in response to the Leveson report on press standards was too restrictive.
A spokesman for the Department for Culture, Media and Sport said the sub-committee was continuing to consider the industry's proposals.
"There is no deadline or timetable for those considerations. They will continue until they reach a decision," the spokesman said.