Today's Sun reports that multimillionaire Petchey has agreed to fund a £30m take-over bid by a four-man group which includes insolvency expert Gerald Krasner.
Petchey, who built up his fortune in property and shares, was Vicarage Road chairman when Elton John owned The Hornets.
The London-based tycoon, who was also once on the board at West Ham, is the second-biggest individual shareholder at Aston Villa.
Petchey’s group are favourites to come up with a rescue package for Leeds, who have debts of close to £100m.
A rival consortium, which included former Huddersfield chairman Terry Fisher and ex-Leeds player Trevor Cherry, pulled out today.