Talks have been taking place for some weeks and a deal could be signed before the end of the month. Final details are still being discussed, within the current preferred option a joint venture - but a takeover by Pearson of Edexcel has not been ruled out.
Although the deal would be small in terms of Pearson's finances, it would signal a revolution in British education. Pearson wants to run Edexcel along the lines of its successful American business NCS, which handles all aspects of the US examination and training systems for state and federal agencies. Extending this to Britain would mean that the exam system, which is currently biased towards paper-based distribution, marking and storage, would be scanned and stored electronically, giving teachers, markers and students easier access and retrieval. It would also reduce the risk of lost or stolen exam papers, for which Edexcel was severely criticised in 2001, when thousands of papers went missing.
It is believed that the Pearson-Edexcel deal has been approved at the highest level at the Department for Education and Skills, which supervises the exam regulator, the Qualifications and Curriculum Authority. The QCA itself was the focus of a political row last summer over re-grading of A level papers.