The Scottish Sun says Leeds boss Simon Grayson has launched a dramatic bid to hijack McArthur's move to Wigan.
The Premier League Latics thought they had sealed an £800,000 deal for the midfielder after his three-day trial before the end of the season.
But promoted Leeds have tabled a bid to Accies chairman Ronnie MacDonald of £1m plus add-ons.
A source revealed: "If Leeds make it back to the top flight they are obviously a bigger club than Wigan.
"Elland Road appeals to James. He is close pals with Leeds' Robert Snodgrass from their days together with the Scotland Under-21s. James was impressed with Wigan manager Roberto Martinez.
"But Leeds have topped Wigan's offer and if they continue being successful they are one of the biggest teams in the country."