Transport for London (TfL) and the Department for Transport (DfT) are in talks with government ministers about a six-month funding deal to save it from financial collapse.
Bosses are negotiating a number of options, Sky News first reported, including a bailout that would guarantee services until April 2021.
Funding is likely to be worth between £1.5bn ($1.95bn) and £2bn, with some conditions attached to the deal.
It was reported earlier this month that a bailout would be provided in exchange for increased fares and curbing remaining free travel entitlements for pensioners and children. The government is also said to be demanding the extension of London’s congestion charge zone as part of the proposal.
Although the talks are ongoing, it is possible that no deal will be secured before the looming Saturday night deadline.
A Mayor of London spokesperson told Yahoo Finance that “negotiations with the government continue.”
“The government needs to give TfL a deal that allows TfL services to continue and which works for all Londoners,” they said.
TfL, chaired by London mayor Sadiq Khan, received a £1.6bn government bailout in May as its finances came under pressure.
It was set to expire on October 17, but the transport operator was granted a two week extension earlier this month in an attempt to conclude discussions.
A TfL spokesperson said: “We continue to discuss our immediate funding requirements with the government and hope these discussions can be concluded successfully soon, so we can help London through this next phase of the pandemic.
“We are doing what we can to minimise costs and aim to continue operating a full service across our network while our funding discussions continue.”
In September, Khan said TfL would require as much as £5.7bn over the next 18 months if the capital’s transport system was to outlast the health crisis. Without a renewed cash injection TfL would be forced to issue a Section 114 order. This is the equivalent of bankruptcy.
London is currently under Tier 2 lockdown restrictions, meaning that people have been banned from socialising with other households in indoor settings, including pubs and restaurants. The restrictions have added TfL’s funding dilemma.
As people were told to stay at home between March and July, in a bid to prevent the spread of coronavirus, TfL’s income nosedived by 90%. Meanwhile, the company’s costs were still running at a staggering £600m a month during lockdown. It is expected to lose £4bn this year.
The transport authority also furloughed around 7,000 of its staff and halted hundreds of construction projects as it battled to save money.
Yahoo Finance has also reached out to the DfT for comment.
Watch: Coronavirus restrictions tighten in London