Authorities in the US and Britain are reportedly thrashing out a deal that would allow Gary McKinnon, if convicted, to serve his entire sentence in the UK.

Under the agreement, McKinnon, who stands accused of hacking into NASA and Pentagon computers, would be guaranteed bail before facing a US trial. If he were found guilty, he would be immediately transferred to the UK, reported tabloid newspaper the Daily Mail, which has campaigned against any extradition.

McKinnon, who was diagnosed with Asperger's syndrome, has admitted the hacking but said he was only looking for evidence of UFOs. His mother is fighting his extradition, warning that he could become suicidal and might not survive the threat of a stint in a maximum-security US prison.

The Home Office this morning declined to confirm or deny that there was a deal in the pipeline, saying only that it was "not appropriate" to discuss it "at this stage". The government is considering new evidence of McKinnon's medical condition.

The news comes a day after prime minister David Cameron met Barack Obama at the White House. Cameron raised the issue of McKinnon's extradition with the US president, who vowed to consider if there was another 'way through' in the case.

Janis Sharp, Gary McKinnon's mother, said she was delighted that the issue had been brought up at the White House by the prime minister, adding that any deal allowing her son to stay in the UK would be "an amazing relief".