Revised plans for school sports funding will be announced on Monday after the Government was forced into a U-turn over proposals to axe entirely the Schools Sports Partnership network, it has been reported.
Education Secretary Michael Gove is expected to announce that some elements of the scheme will be retained at least until after the 2012 London Olympics but with much-reduced central funding.
Staff numbers will also be cut and the organisation scaled back under a compromise deal agreed with Cabinet colleagues, the Guardian said.
A change of heart was first signalled by David Cameron on December 1 - just a week after he vigorously defended the plan to axe a scheme he said had been a "complete failure".
It came after world champion diver Tom Daley, 16, and several prominent British Olympic champions were among the signatories to a letter calling for a rethink amid fury from headteachers.
The about-turn is believed to have been timed to coincide with a visit by the Prime Minister to the Olympic stadium in east London to turn on Christmas lights.
Culture Secretary Jeremy Hunt was reported to have taken the lead in demanding at least a partial reprieve - arguing scrapping partnerships could harm the UK's pledge to use the Games to increase participation.
The Guardian said the existing £162 million-a-year Department for Education funding would still be stopped from March - and replaced at a much lower level worth "tens of millions" until 2015.
Cash would be drawn from existing education, health and culture budgets.
