The Daily Express says City are prepared to make a legal challenge to attempts by Liverpool, Manchester United, Tottenham and Arsenal to toughen up UEFA's financial fair play rules for Premier League clubs.
A letter from those four clubs to Premier League chief executive Richard Scudamore calls for full spending controls - where clubs must break even - without wealthy owners, such as City's sheikh and Roman Abramovich at Chelsea, being allowed to cover the losses.
City and Chelsea are opposing any spending controls being brought in but it is likely the 20 clubs will agree on a compromise at their February meeting, which will allow a fixed amount of losses to be covered by owners.
The letter from the four clubs states: "Thank you for your continued work on the vital subject of Financial Regulation for the Premier League.
"However, we do not feel the latest proposals go far enough to curb the inflationary spending which is putting so much pressure on clubs across the entire League.
"We continue to believe that to be successful and have the best chance of gaining at least the 14 votes necessary, any proposals for Financial Regulation must include meaningful measures to restrict the owner funding of operating losses."