All the party leaders now agree a royal charter is the way forward
David Cameron and Nick Clegg are continuing to negotiate over press regulation in a last-ditch attempt to reach a deal ahead of a Commons vote later, the BBC understands.
The Lib Dem leader and Labour want a new watchdog backed by a law, while the prime minister is opposed to this.
But it is understood Mr Cameron may accept a "tiny bit of statute".
Culture Secretary Maria Miller says she hopes a cross-party "solution" was still possible.
She told the BBC there had been "compromise on both sides" to make sure the recommendations of the Leveson inquiry sparked by the illegal practice of phone hacking by journalists "works in practice".
MPs are due to vote on the terms of the new watchdog set up by royal charter.
David Cameron faces a potential defeat, with his coalition partners Liberal Democrats choosing to side with Labour.
Rival plansOn Thursday, the prime minister called time on cross-party talks on reforms and instead published his proposals to establish a tougher press regulator.
Maria Miller: "I think there has been compromise on both sides"
In response, deputy prime minister Nick Clegg and Labour leader Ed Miliband joined forces to unveil rival plans.
Both the prime minister and the two other parties agree on the concept of a royal charter, a formal document used to establish and lay out the terms of an organisation, for example the Bank of England or the BBC, that cannot be changed without government approval.
However, a major sticking point is whether a new self-regulatory body should be backed by law.
Mr Cameron believes enshrining it in law will harm press freedom but Mr Clegg and Mr Miliband insist on it - they say the rules would lack impact without it.
The other main differences in the rival royal charter, which Mr Clegg launched with Mr Miliband, involve not giving the press a veto over the members of the regulator and preventing it from being watered down or strengthened by future governments.
Conservative sources have told the BBC that Mr Cameron was now "reluctantly" prepared to accept changes to his plans which, if passed, could mean his royal charter may be altered - but only by a two thirds majority of both Houses.
If it comes to a Commons vote, the prime minister has indicated he will abide by the decision.
Earlier on Sunday, Chancellor George Osborne and Labour's Harriet Harman both told the BBC they hoped the parties could reach a deal on the key elements of a new regulator before Monday's vote.
But Harry Potter author JK Rowling - who gave evidence to the Leveson Inquiry about press intrusion into her family's privacy - said victims were being "hung out to dry" over the reforms, urging MPs to "have the courage" to protect them.
Lord Justice Leveson's inquiry into press ethics found newspapers had "wreaked havoc with the lives of innocent people" under the existing regime of self-regulation, and called for a new, independent regulator backed by legislation - something that has prompted months of political wrangling.
'Compromise on both sides'Speaking to the BBC on Sunday evening, Ms Miller said it was important that Labour was "very clear on the problems with their previous recommendations with regards to statutory underpinning" of a new watchdog.
She stressed her party was not prepared to see "statutory regulation of the press" because of the "chilling effect" it would have on journalism.
Ms Miller added: "I hope the discussions we have over the next 24 hours can really make sure we can come together and have a real solution here.
"I think there's been compromise on both sides to make sure we take the Leveson Report, which was never a blueprint for the regulation of the press, and make sure it works in practice.
"One of the important things to do is to have the debate in Parliament."
Hugh Grant: "[The plans] either have glaring omissions...or moth holes, designed by press lawyer, which can later be exploited"
Hacked Off, the campaign group representing some press abuse victims that has led calls for full implementation of the Leveson principles, called the royal charter proposal a "shameless sell-out to his friends in the national press".
One of its key figures, the actor Hugh Grant, told the BBC: "It was never ideal that this would be done by royal charter - that seemed to us strange to haul this medieval instrument out of history and use that - but it's not bad.
"The important victims of this - and I do not include people like myself... would be supportive of it.
"That's why it's a really crucial debate for MPs. MPs promised victims to do right by them and they have that chance on Monday."
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