Philip Hammond will discuss the proposed merger between defence firm BAE and aerospace group EADS with the French and German defence ministers at a Nato meeting in Brussels today.
The companies have until Wednesday to announce to the stock exchange if the deal, which has been beset by problems over ownership and national security. will go ahead.
The talks today may ask for an extension to that deadline.
On Monday, Philip Hammond told the BBC he did not think there was any chance the deal would be settled by the deadline.
The merger would create a £30 billion defence and aerospace giant to compete head-to-head with rivals such as Boeing and Lockheed Martin.
British and US governments are both insisting that the French and German governments reduce their stakes in EADS.
The complicated deal, unprecedented in scale for a defence and aerospace business, has been beset by concerns over national security and claims for ownership by the three involved governments, Britain, France and Germany.
Business commentators have suggested this week that the deal is likely to fail because of the irreconcilable complexities.
