The Saudi newspaper Al-Hayat said that during the row 55-year-old Australian nurse Yvonne Gilford was struck over the head with a teapot, and then stabbed with a knife she had used to defend herself.
Ms Gilford was taunted with being an "old lady" who would soon be sent home because of her age, the article said, quoting Saudi police sources.
The newspaper, which is regarded as close to official thinking, said one of the two nurses confessed to the murder shortly after she was arrested by police on 20 December, allegedly withdrawing cash from Ms Gilford's bank account.
Officers had been keeping watch on a cash dispensing machine after money went missing from Ms Gilford's account after the murder on 11 December. The other woman reportedly confessed two days later.
The newspaper also claims that fingerprints of only one of the accused women were found at the victim's flat. Diplomatic sources said the pair, Lucy McLauchlan, 31, from Dundee, and 41-year-old Deborah Parry, from the Midlands, had been escorted to the scene of the murder at the King Fahd Military Medical Complex, Dhahran, two days before Christmas where they allegedly re-enacted the crime before Saudi investigators.
Both women, who have declared their innocence in conversations with relatives, are expected to be visited in jail by British consul, Tim Lamb, later today, when they will choose a lawyer to represent them.
A Foreign Office spokesman said Mr Lamb would be seeking clarification from Saudi officials about the exact wording of the murder allegation and whether there were any "ancillary" charges - a reference to the rumours of theft.
The spokesman added that the intervention by the Saudi ambassador to Britain, Dr Ghazi Algosaibi, on Saturday, had been "helpful", especially his comments that the death sentence was by no means automatic even for those found guilty of murder.Reuse content