A proposal for a single bank supervision agency drawn up by the Senate's chief architect of financial reform looks unlikely to survive negotiations over a landmark bill, said a source familiar with the discussions on Friday.

Senate Banking Committee Chairman Christopher Dodd's Financial Institutions Regulatory Administration, which he proposed in November, likely will not be in a revised bill that is expected to be released next week, said the source, cautioning that these plans could change.

Instead, the Federal Reserve may keep its role as overseer of large bank holding companies, and the Comptroller of the Currency's office may remain in place, said the source.

The change in plans could mark a key turning point in the Senate's long discussions about regulatory reform following the worst U.S. financial crisis since the 1930s.

If the proposed FIRA is dropped, the bill Dodd hopes to bring to the Senate floor soon would more closely align with one approved in December by the U.S. House of Representatives, simplifying House-Senate reconciliation of their measures.

But abandoning the FIRA would also mark a retreat from a bold plan by Dodd to consolidate a patchwork of bank regulators that was widely criticized after the crisis for gaps in oversight and narrowness of vision in monitoring the industry.

The FIRA would have streamlined the bank oversight duties of the Fed, the Comptroller, the Federal Deposit Insurance Corp, and other now separate agencies.

But the Fed in recent weeks has pushed hard to preserve its role as supervisor of the nation's largest bank holding companies such as Citigroup and Bank of America .

As plans stand now, the Fed may keep that job, but be stripped of its supervision of state-chartered banks in the Fed system. Responsibility for those banks would shift to the FDIC, which already examines many other state-chartered banks that are not in the Fed system, the source said.

Dodd's plan for closing the Office of Thrift Supervision, which regulates thrift institutions, appears to be unchanged. The House bill calls for closing the OTS, as well.

The FIRA was seen by some as the potential home for a new Consumer Financial Protection Agency that is being proposed by Obama to shield Americans from abusive mortgages, deceptive credit cards and other dodgy financial products.

If the FIRA disappears, the CFPA's future looks uncertain, with Democrats appearing unlikely to insist that it be an independent agency. Some congressional aides have said the CFPA could be located within the Treasury Department.

(Reporting by Kevin Drawbaugh; editing by Carol Bishopric)