Betty Boothroyd, the Speaker of the House of Commons, may drop the threat of disciplinary action against Sir Jerry Wiggin, letting him off with making a full apology.
Sir Jerry tabled an amendment on behalf of a commercial interest in the name of his colleague Sebastian Coe, without his permission.
A senior Labour source said there would be "impatience verging on anger" with Ms Boothroyd if Sir Jerry avoided being referred to the Privileges Committee.
Westminster sources were quoted as saying the Speaker was reluctant to refer Sir Jerry's case to the committee both because its inquiry could take several months and because it was deeply split on party lines in a way that would "not help the reputation of Parliament".
Meanwhile, John Major and Tony Blair have both threatened to "go it alone" over the Nolan report on rules for MPs' private interests if the two main parties cannot reach agreement.
Mr Major defended his plan to set up a further committee to consider Lord Nolan's recommendations, which include a ban on MPs taking paid lobbyist jobs. "I hope the Opposition will co-operate with this committee on an all-party basis. If they do not, the Government will consult MPs themselves and frame their own proposals," he said in a statement unusually issued through Conservative Central Office on Saturday.
Mr Blair, in a letter to the Prime Minister, said the public would not understand why another committee needed to be set up. Labour leaders are threatening to boycott the committee unless the Government agrees to stick to the 12-month timetable for reform laid down in the Nolan report.
But Jeff Rooker, Labour spokesman on Commons issues, said that if the Government had not acted by July, Labour MPs would begin to make full declaration of their interests, as required by the Nolan report. "It would be hypocrisy to do otherwise," he said.
Tony Newton, the Leader of House, is expected to set out details of the new committee today, and some Labour insiders say that they would consider using an opposition debate on Wednesday to force a vote on the issue if the proposals are considered inadequate.
The strength of public opinion was made clear when more than 20,000 people telephoned BBC Radio 4's The World This Weekend to vote on whether an outside arbiter was needed to regulate MPs' behaviour. Only 2,650 callers (13 per cent) thought MPs could be trusted to regulate themselves.
Mr Major's statement put him at odds with most of his backbenchers.
The Prime Minister's statement said: "I do not just accept the broad thrust of Nolan, I agree with it." But Conservative sources said that while he agreed with the broad thrust, much work was needed on the details to make the report workable.
Sir Archie Hamilton, the Tory MP for Epsom and Ewell, criticised Mr Major's statement: "I don't agree with him that Nolan was merely calling for more openness, because he clearly demanded a ban on all paid advocacy. If we go down that road we would have to have a Commons where nobody is paid for any outside work and MPs would have to be given far higher salaries."