Irene Rosenfeld, chairwoman and chief executive of Kraft, will raise her offer in the next two weeks in a final attempt to persuade Dairy Milk-maker Cadbury to succumb to a bid, the newspaper said in an unsourced report, though it did not say what the bid would be raised to.
No-one at Cadbury could immediately be reached for comment.
The maker of Dairylea and Oreo cookies' cash-and-share offer currently values Cadbury at 736 pence a share, 8 percent below its closing price of 797-1/2 pence on December 31.
Under UK Takeover Panel rules, Kraft has until January 19 to raise its offer, after which it can only do so if a rival bid emerges.
A report on Saturday suggested Italian confectioner Ferrero had met with private equity firms as well as Hershey Co
Cadbury said on December 14 Hershey and Ferrero had both indicated they were also contemplating bids.
Britain's Takeover Panel gave Cadbury three extra days this week to publish its 2009 results that could become a key plank in its defense against Kraft's bid.
(Reporting by Matt Scuffham; Editing by David Holmes)