The DUP is expected to say today that it will make its participation in a devolved administration at Stormont conditional on the British government providing sufficient funds to deal with the water rates issue.
The DUP statement, due this morning, will be the clearest sign so far that Ian Paisley's party is giving active consideration to forming a power-sharing government after next week's Assembly elections.
Water rates are due to be introduced in Northern Ireland in April.
Householders have been told that by 2009 the charges will be treble this year's amount.
The introduction of water rates on top of significantly increased annual domestic rates charges has become the main issue raised on the doorsteps during canvassing for next week's elections.
Later today the DUP will begin distributing 30,000 leaflets telling voters how it plans to deal with the controversy.
It is understood that Mr Paisley will say that if the DUP is returned as the largest party, it would take the Finance and Personnel portfolio in the Stormont Executive, giving it direct responsibility for water rates.
