No official statement has been released by Thomas Cook, but the company is telling customers via Twitter to carry on as normal and that if it collapses, all holidays will be covered as they are Atol-protected.
Foreign Secretary Dominic Raab says contingency plans to rescue customers are in place if the firm can not be rescued from collapse.
This means that their accommodation overseas will be paid for, although they may have to move to a different hotel or holiday home.
"We will know by tomorrow (Sunday) if agreement is reached", the source told AFP.
The firm's shareholders and creditors were due to meet early Sunday, with a meeting of the board of directors to be held in the afternoon.
But holidaymakers were already reporting problems, with guests at a hotel in Tunisia owed money by Thomas Cook being asked for extra money before being allowed to leave, according to a tourist interviewed by AFP.
Thomas Cook is trying to secure another $250 million in addition to the $1.125 billion in funds it secured last month in order to continue operating.
"The Thomas Cook rep said he'd contacted the chief of police [about their situation]". "The owner and the staff locked the door, they don't let anybody out and don't let any coaches in until they are paid".
Frank said if they can't secure the funding, it "may" be quite hard for Thomas Cook to continue.
British tourists walk outside the Orange Beach hotel in in Tunisia's coastal town of Hammamet Credit AFP
Ryan Farmer, of Leicestershire, said many tourists refused the demand, since they had already paid Thomas Cook, so security guards shut the hotel's gates and "were not allowing anyone to leave".
"I can reassure people that in the worst-case scenario, the contingency planning is there for people to avoid being stranded", he told BBC's Andrew Marr Show.
Another customer, Dean Williams, said the hotel had "taken it upon themselves to charge the customers as they haven't been paid by Thomas Cook".
The Transport Salaried Staffs Association, which represents workers at the debt-laden company, said Saturday that the government should be ready to assist with "real financial support".
General Secretary Manuel Cortes called for an urgent meeting with Business Secretary Andrea Leadsom.
For many thousands on holiday with the company at the minute the British government has said it is ready to fly holidaymakers back to the United Kingdom if the tour operator collapses.
They need a £200m cash injection to survive.
He said: "We hope a deal can still be done but Dominic Raab and other ministers must come clean and tells us exactly how much the Government is willing to spend bringing 150,000 British holidaymakers home".
By May 16, 2019, Thomas Cook had issued its third profit warning in less than a year, saying discounting and higher fuel and hotel costs will hurt it during the peak summer season.