Tube maintenance company Metronet is facing the threat of administration unless there is a last-minute rescue.
Metronet is part of a public-private partnership (PPP), which use private sector money to fund public projects.
It had asked London Underground for £551m to cover extra costs to upgrade parts of the Tube system but instead was awarded £121m by the PPP regulator.
Metronet said that its board would be meeting before making a statement either late on Monday or on Tuesday.
"Metronet has been a disaster for its owners, WS Atkins, EDF, Balfour Beatty, Thames Water and Bombardier," the BBC's business editor Robert Peston said.
"Unless there's a last minute intervention by the Treasury this morning, Metronet will go into administration today," he added.
"The losses for Metronet's lenders may run to hundreds of millions of pounds."
Metronet is responsible for maintaining London's Bakerloo, Central, Victoria, District, Circle and Metropolitan tube lines.
The company had planned to invest £17bn over the next 30 years under a PPP scheme. However, it is estimated that there will be an overspend of as much as £2bn by 2010.
Metronet has been embroiled in a battle over who should foot the bill.
Transport for London (TFL), the transport authority that controls London Underground, said that the overspend was down to mismanagement and a failure to control costs by Metronet.
Metronet has countered that TFL and London Underground have changed the specifications outlined in the contracts, asking for higher quality work and more expensive upgrades.
Should Metronet go into administration, then there would be very little impact on consumers and travellers, London Underground said.
Metronet is not responsible for the day-to-day running of the underground train system, and London Underground said it would look to ensure that services and maintenance carried on as normal.
At the same time, Metronet would continue to function as a company, albeit run by administrators that would be appointed at a later date.
However, one significant change would be that TFL rather than Metronet would probably be left to pick up the bill for any overspending on maintenance or renovation work, analysts said.
The collapse of Metronet would also be a blow to the UK's new Prime Minister Gordon Brown as he pushed through the PPP for maintaining the Tube as Chancellor, the BBC's business editor said.
Analysts added that the fate of the Tube's maintenance contracts, and whether they should be run by private or public companies, could become a hot political topic as Londoners are asked to vote for a new Mayor.