"The decision on help for Greece has been taken in principle within the euro zone," said a source in the German coalition government who has knowledge of the negotiations.
Various options were under consideration and no final decision had been taken but the most likely possibility was to offer "bilateral help", the source said.
The comments were the strongest signal so far that European Union economic heavyweight Germany may be ready to step in to stave off a crisis of confidence in the 16-nation currency bloc that has roiled markets around the globe.
German government spokesman Ulrich Wilhelm called reports that a decision had already in effect been taken "unfounded," but the newspaper Financial Times Deutschland also said Germany was preparing an aid package for Greece.
The Wall Street Journal said Germany was considering taking a lead role in a plan with its European Union partners to offer Greece and other euro zone countries loan guarantees in an effort to calm market fears of a debt default. German Finance Minister Wolfgang Schaeuble discussed the idea in recent days with European Central Bank President Jean-Claude Trichet, the WSJ said in a report on its website, quoting a person familiar with the matter.
The reports came two days before a European Union summit expected to discuss the Greek debt crisis.
