The Treasury is understood to be finalising plans for a new windfall tax on energy firms that would be used to help those who are struggling with the cost-of-living crisis.
Boris Johnson is reportedly poised to announce a multibillion-pound package of measures to alleviate some of the pressures facing households across the country, who are being hit with the soaring cost of energy and food.
The move has previously been suggested by Labour and some senior Tories, but has until now been resisted by ministers.
The Times said measures which could be introduced include increases in the warm homes discount, winter fuel allowance and a cut in council tax, while a VAT cut is said to be being mooted.
Downing Street is hoping the announcement will take the heat off the prime minister following the publication of Sue Gray's full report into Partygate, which is expected on Wednesday.
Earlier on Tuesday, the energy minister, Kwasi Kwarteng, said a windfall tax on energy companies was not necessarily the right way to fund help for consumers struggling with the rising cost of living.
When asked if he supported a windfall tax, he told a parliamentary committee: "I have been very clear about a windfall tax: I don't think it supports investment, I don't think it's necessarily the right thing."
However he stressed any decision would be for the chancellor, Rishi Sunak, to make.
The Daily Telegraph said Mr Sunak had now concluded that a one-off windfall tax was needed, despite having opposed the measure previously, with further pressure on household budgets and a doubling of profits for some energy firms.
The chancellor was widely reported to be meeting with the prime minister on Wednesday to "sign off" on their "multibillion-pound" plan. Thursday has been suggested as the date for the announcement.
It comes after Ofgem chief executive Jonathan Brearley told MPs the regulator is expecting the energy price cap to increase by a further £830 to £2,800 in October.
He said this was due to the market coping with "once-in-a-generation" price changes "not seen since the oil crisis of the 1970s".
Labour has been piling pressure on the government to act. Commenting on the prospect of higher bills in the autumn, the shadow chancellor, Rachel Reeves, said: ”This will cause enormous worry for families already facing soaring bills. How many more alarm bells do the Conservatives need before they act?
“We need an emergency budget now, with a windfall tax on oil and gas producer profits to lower bills.”
Ed Miliband, the shadow climate secretary, said: “Energy bills are already sky high for millions of families. This is a social emergency- Government should be taking every measure possible to support the British people, including a windfall tax on oil and gas giants making record profits.”
A government spokesperson said: "We understand that people are struggling with rising prices, and while we can't shield everyone from the global challenges we face, we're supporting British families to navigate the months ahead with a £22bn package of support.
"That includes saving the typical employee over £330 a year through a tax cut in July, allowing people on Universal Credit to keep more of the money they earn - benefiting over a million families by around £1,000 a year, and providing millions of households with up to £350 each to help with rising energy bills.
"The chancellor has been clear that as the situation evolves, our response will evolve - and we stand ready to do more."
