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However, it is believed that a significant milestone in the negotiations may be passed this week, although a formal announcement may not be made for a number of weeks.

An article which appeared in the Financial Times yesterday (26 May), suggested that the insurance company could submit a proposal to the Financial Services Authority (FSA) as early as this week.

However, senior media relations manager at Norwich Union Lucy Grubb said this was "pure speculation".

But Grubb said Aviva, which trades under the name of Norwich Union in the UK, was hoping for an agreement to be reached within the "next few weeks".

The speculation follows more than 18 months of negotiations between Spottiswoode, elected to champion the cause of with-profits policyholders, and Norwich Union over the insurer’s estimated £5bn surplus in two funds - CGNU Life and Commercial Union Life assurance Company Limited.

Traditionally in a reattribution, eligible policyholders may chose to receive an incentive payment in return for giving up their interest in any possible future payouts from the inherited estate.

However, last summer Norwich Union made the decision to distribute £2.4bn from its "excess surplus" of inherited estate to policyholders and shareholders in a 90:10 ratio.

The question all policyholders will face if Spottiswoode and the FSA accept Norwich Union’s proposal, will be whether they want to risk missing another future payout, in return for a one-time windfall.