The Home Office has said it is in "detailed engagement" with police over planned funding changes after a stark warning from the head of the Metropolitan Police that the force could not afford further large cuts.
Following the latest terror attack in London targeting worshippers near a mosque, Commissioner Cressida Dick said she had made clear to ministers that the Met could not take large cutbacks to its budget.
ITV News reported that ministers had decided to scrap plans to change the police funding formula which would have hit large forces like the Met.
The Home Office said no decisions had been taken but acknowledged that the proposals were the subject of active discussion.
"The Government is undertaking a period of detailed engagement with policing partners and independent experts on the police funding formula," a spokesman said.
"New proposals will not be implemented without a public consultation."
London mayor Sadiq Khan has warned that the Met - which is already facing cutbacks of £400 million - stands to lose between £174 million and £700 million a year under the proposed changes, which would see more money go to smaller forces.
Ms Dick told ITV News: "I am in a conversation with the Government to say, given what has happened, we actually do not need large cuts, that is for sure
"I am sure we can become more efficient over the next few years.
"I am sure we can save costs and money in parts.
"But, no, I do not believe the Metropolitan Police should suffer large cuts."
Mr Khan said that even dropping the changes to the funding formula would not be enough to ensure the Met was properly resourced to deal with the threat of terrorism and rising violent crime.
"The Home Office has already made the Met find £600 million of savings following cuts since 2010.
"Their plans to make the Met find a further £400 million of savings on top of this over the next few years will have a big impact on policing in London," he said.
"If the Government are serious about keeping all Londoners safe then they need to guarantee that they will fully fund the Met - which means real terms increases, cancelling the planned £400 million of cuts and giving London the full allocation of national, international and capital city funds."
The outgoing chief constable of Lancashire, Steve Finnigan, said forces across the country had reached a "tipping point" as a result of past spending cuts.
Mr Finnigan, the UK's longest serving chief constable, told The Guardian he understood the need for the police to make a contribution during a period of austerity but that the cuts had been "too quick and too deep".
"I have said for many years now that there will be a time lag (on the impact of the cuts) and I think we are seeing that now. The cracks are appearing in policing," he said.
"We are at a tipping point and we need to have an honest conversation. I do think people are less safe in this country now and I say that with a really heavy heart."