UPDTATE: Tulisa has since been arrested. Read the full story here.
The paper published hidden camera footage of the former 'X Factor' judge appearing to offer to supply the class A drug to an undercover reporter.
Major Crimes Unit are now said to be examining the dossier of evidence obtained by the reporter, with Sun sources adding that she - along with her alleged dealer, rapper Mike GLC - will be arrested and quizzed by detectives "within days".
A Scotland Yard spokesperson said on Sunday: “We have received information concerning the alleged supply of illegal drugs. We are considering the information received.”
In the footage obtained by the undercover reporter, Tulisa can allegedly be heard bragging about her connections to the drug world, offering to set them up with dealers.
"Half my phone book sells it. Of course I can get it for you," she reportedly said. "Half the guys I know are drug dealers. One's a massive cocaine dealer. He's my best friend. He's a gangster - he's my gangster.
"We talk in lingo. I'll say, 'Hi, have you got any sweets?' and he'll be like, 'How many sweets do you want?'"
The reporter was then shown text messages showing previous orders, passing on the details of her alleged dealer, who the undercover journalist contacted to place a fake order worth £800.
Tulisa - who was axed from her role as a judge on 'The X Factor' two weeks ago, and also bounced back from a sex tape scandal last year - has gone into hiding since the story broke and is yet to comment on the reports.
On Sunday, police cars were seen outside her £4m Hertfordshire mansion and according to The Sun, her cousin and N-Dubz bandmate Dappy, and PA Gareth Varey were also seen arriving at her home to support the fallen star.
Tulisa has previously admitted to a history with drugs in her autobiography 'Honest', but claimed that she hadn't been near them since she was a teenager.
“I smoked weed when I was a kid and got into fights,” she said. “I stopped and I’ve never touched anything else since and never will.”
Adding that she was a 'role model' for her young fans, she said: “Why am I a role model? Because I have been myself. I’m an inspiration for Broken Britain.
"I didn’t want to be seen as a negative role model for young kids. I felt like I had a responsibility to behave in a certain way.”