Villeneuve, who is currently lying second in the drivers' championship behind Michael Schumacher, has been linked to a proposed Formula One team to be created by British constructor Reynard and British-American Tobacco. Villeneuve has also been reported as taking a shareholding in the team.
Villeneuve won the Indianapolis 500 and the Indy Car World Series drivers' title, driving a Reynard car in 1995 and he and his manager, Craig Pollock, have maintained a relationship with the constructor. A five-year deal between the two worth pounds 175m has been agreed, according to press reports.
Villeneuve is in the second year of his contract with Williams and it is understood that Williams have exercised their option on his services for 1998, but have yet to reach final agreement on the details.
It was also reported that the new team, BA Team Reynard, had agreed a two-year deal with the French engine-tuners Mecachrome for a supply of ex-Renault V10 engines.
Rick Gorne, the Reynard managing director, admitted his company have been in discussions with BAT, although nothing has been finalised. "At the moment, the official line is that we are just one of many companies being considered by BAT, if they decide to pursue a F1 venture," Gorne said.
"We would definitely consider entering F1, but only if we have all the right pieces in place, including the budget, drivers, engine and tyre package."
The reports also suggested that the new team would attempt to buy Minardi at the end of this year in order to participate immediately in the sport.
Any purchase of an existing team would need the support of all the other signatories to the Concorde Agreement if they were to become a signatory and beneficiary of guaranteed income from television rights.
Reynard have attempted to enter F1 before. Adrian Reynard, the team owner, launched a project in the late 1980s, but abandoned the programme because of its cost in 1991 after 18 months' work.Reuse content