Talks between Toro Rosso and Honda about a possible F1 engine supply deal are progressing following a meeting between Red Bull's Helmut Marko and Honda chief Masashi Yamamoto on Tuesday.
Toro Rosso has emerged as the leading candidate, even though the Italian team has a deal with Renault in place for next year.
Motorsport.com understands Tuesday was the latest in a series of meetings between Red Bull motorsport advisor Marko and Yamamoto, who is responsible for Honda's motorsport budget and reports directly to the board, in recent weeks.
Sources with good knowledge of the situation say talks have focused around Toro Rosso taking a Honda supply from 2018, with Marko interested in the senior team Red Bull switching in the future if Honda improves its performance sufficiently.
Should Toro Rosso and Honda come to an arrangement for next year, the team would also need to source a gearbox contract.
Motorsport.com understands McLaren could potentially be in position to supply Honda with a gearbox that the Japanese manufacturer could then offer as a package with its engine to Toro Rosso.
As any Toro Rosso deal will effectively replace the Sauber customer deal that fell through, it is believed McLaren would not stand in the way.
But it is understood the outfit would not be keen for rival Red Bull to get the engine and would consider vetoing such an arrangement.
McLaren’s deal with Honda continues into next year but it is still evaluating its options following poor performance - even though Ferrari and Mercedes have made it clear they will not supply engines to the team.