According to a report in The Observer newspaper, the deal could see Malone, who owns US cable giant Liberty Media, take anything between a 25% and a 51% stake in the company, which would effectively give him control of the UK's largest cable company.
News of the talks comes as NTL agrees a restructuring plan, which calls for half of the cable firm's £12bn debt to be written off by investors, following the appointment of advisers. The recapitalisation has been described as the most complex in UK corporate history.
It is understood that the two held detailed talks last week in Europe. Malone has been in Europe recently trying to push through his £3.4bn deal to buy the cable TV assets of Deutsche Telekom. The deal has been blocked by the German competition authorities.
Malone already has a 25% stake in NTL rival Telewest. If a long-talked-of merger of the two cable companies goes ahead, a significant stake in NTL will put Malone in a very powerful position.
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