The chancellor is expected to unveil new support for workers in parts of England under tier two restrictions.
Rishi Sunak will announce an update to the Job Support Scheme (JSS) - which is set to replace furlough in November - in the Commons on Thursday.
Critics say not enough is being done for companies in tier two areas that have seen demand collapse without being formally required to shut.
This is while those made to shut in tier three areas get emergency support.
Talks have been ongoing throughout Wednesday, with the government said to have acknowledged that while there are three tiers of pandemic shutdowns, there are only two tiers of support.
In tier three areas, the government will pay two-thirds of affected workers wages, up to £2,100 a month from 1 November.
But in tier two regions the only help available will be the standard JSS, which is designed to support only "viable" jobs and requires a much larger contribution from employers.
The gap, particularly though not exclusively affecting pubs and restaurants in tier two areas, has been referred to by the hospitality industry as the "worst of all worlds".
Key Conservative figures, such as the West Midlands Mayor Andy Street, have also been critical of the disparities in help, along with a raft of Labour local leaders and MPs.
Mr Sunak's original winter economic plan - publicly backed by the leaders of both business lobby group the CBI and the TUC on the steps of Number 11 - was predicated on a period of declining infections and a recovering economy, says the BBC's economics editor Faisal Islam.
But that has not transpired, forcing the government to bring in tougher local lockdown rules.
'Viable jobs'
Under tier two, the second highest level of risk, households cannot mix in indoor spaces, which is likely to crush demand in sectors like hospitality and leisure.
In this scenario, critics say the standard Job Support Scheme is likely to fall short, with many fewer firms than expected signing up.
Options being discussed in Whitehall include more generous taxpayer wage support for businesses in tier two, up from the current level of 22%, and grants offered through local authorities.
With so much of England now in tier two, even small increases in support could end up being very expensive. Business and union leaders will be briefed on the changes on Thursday.
It comes amid warnings that unemployment could rise as high as 8.5% in the first half of next year without more government support for struggling businesses.
In the three months to August, redundancies rose to their highest level since 2009, the Office for National Statistics (ONS) said.
The number claiming work related benefits, meanwhile, hit 2.7 million in September - an increase of 1.5 million since the beginning of the crisis in March.