This proposal differs from the earlier recommendation of Union Railways, the BR subsidiary planning the link, that it should follow the route of the existing North London Line through Islington and Hackney.
Building the link overland into King's Cross would have saved money, enabling construction costs to be cut from the pounds 4.5bn originally envisaged to pounds 3bn.
BR now hopes to trim costs by abandoning plans for a pounds 1bn underground station at King's Cross for trains from the Continent in favour of a cheaper and more modest above-ground terminus.
It may also use steeper gradients and reduce the amount of tunnelling elsewhere on the 68- mile line from the Kent coast.
The decision not to build a dedicated underground terminus may jeopardise the planned multi-billion pound leisure and retail development of a derelict 150-acre site north of King's Cross planned by the London Regeneration Consortium.
But BR is likely to argue that it would not have been able to attract private investment for a costly underground station, given the slump in the property market.
The Union Railways report being submitted to John MacGregor, Secretary of State for Transport, contains a number of fully- costed options for the route. When a route is eventually chosen it may yet prove to be a hybrid of several on offer.
BR is thought to have been concerned that using the existing North London Line for part of the route would have provoked so much local opposition and caused such property blight that it would have held up the badly delayed project still further. This might have cancelled out savings achieved by not having to build a 7km tunnel between Stratford, east London and King's Cross.
Union Railways hopes for a government go-ahead in the next three months. This would allow it time to carry out public consultation and obtain parliamentary approval ready to begin construction in 1995 and open the line by 2000.