Number 10's hand-on involvement is a further indication of the prime minister's determination to introduce 'third way' solutions to failing authorities, according to the paper.
Leaks of the speech by David Blunkett, the education secretary, made at the North of England Education Conference have already fuelled speculation as to which councils would be early targets.
Graham Lane, education chair of the Local Government Association, said rumours were already circulating that Liverpool City Council would be failed, even though Ofsted has yet to arrive in the city.
If they make it to the approved list, authorities could take over the duties of rival councils judged to be struggling.
The LGA is urging all education authorities to apply for a place on the list - and the opportunity of running services such as admissions and pupil welfare.
The LGA wants to take advantage of plans to hive off council education services. Adverts seeking contractors were placed in the press by the department for education and employment this week.
Mr Lane believes few other organisations will be able to compete with the expertise available within local government.