The first of the nine British citizens held in Guantanamo Bay are reportedly expected home within weeks.
The US has softened its demand that they face prosecution or indefinite detention in the UK, The Times says.
US ambassador at large for war crimes Pierre-Richard Prosper told the newspaper the detainees could be repatriated if the UK "managed" them.
Neither the UK Foreign Office nor the US State Department could clarify his reported remarks.
The suggestion of possible repatriation came as human rights campaigners urged Tony Blair to end the "travesty of justice" for prisoners at Guantanamo Bay.
Amnesty International UK wrote to the prime minister ahead of Sunday's second anniversary of terror suspects arriving at the camp in Cuba, to say it was "nothing short of a disgrace".
**'Dangerous people'***
Prosper indicated the US would expect returnees to be held long enough for an investigation to take place.
He told The Times they were "dangerous people engaged in dangerous activity".
He said: "There can't be a situation where a dangerous person is released and [flies] an aeroplane into the next tall building around the world. That concern remains."
Prosper said Washington was not looking for guaranteed convictions, with the outcome it expected depending on the individual prisoners.
But he added: "We are asking that they be detained and investigated and/or prosecuted."
**'Best outcome'***
The detainees include those arrested in Afghanistan during the war and others suspected of links with the former Taleban regime or Osama Bin Laden's al-Qaeda terror network.
George Bush last year named two of them - Feroz Abbasi, of Croydon, and Moazzem Begg, of Birmingham - as candidates for trial by a military tribunal.
But Prosper told The Times the US president "has an open mind and has been talking to the prime minister about the cases overall, as to what the best outcome, the best solution can be".
The 600 suspects, from 40 countries, had been divided into three groups - those posing a high risk who must be prosecuted and/or detained, those posing a medium risk who can be repatriated, and those posing little or no threat, he added.
The British suspects were in the first or second category, Prosper told the paper.
And the US authorities' "great concern" was the "hardened cases" among them might mount a fresh attack.
They had intelligence to that effect, Prosper added..
He reportedly denied the detainees had been subjected to coercion.
Prosper said: "To say Guantanamo Bay is a psychologically coercive environment is false."
**'Too terrified'***
Louise Christian, the solicitor acting for families of three of the detainees, reportedly welcomed Prosper's comments and urged the government to give Washington the assurances it required.
"It is absurd to say these people would pose a terrorist risk," she told The Times.
"They have been locked up for two years and they would probably be too terrified to leave their own homes."
UK and US officials have been negotiating over the fate of the British prisoners for some time.
The Britons' case was raised by Blair personally during November's state visit to Britain by Bush.
At prime minister's questions on Wednesday Blair said: "I think it is particularly important to emphasise, when there is still rightly a lot of concern about possible terrorist activity, that some of the information we have had out of those detained at Guantanamo Bay has been of immense importance."
**PHOTO CAPTION***
This file photo shows detainees as they prepare themselves for the evening prayer at Camp X-Ray in Guantanamo Bay, Cuba by facing towards Mecca. (AFP/File/Peter Muhly)