Williams looks set to announce that it will move to Mercedes for its F1 engine supply after confirmation that talks have taken place about a deal for the 2014 season.

Reports ahead of the Monaco GP suggested that a deal could be in the pipeline for the new campaign, when F1 will switch to new engine regulations centered on 1.6-litre turbocharged units as opposed to the 2.4-litre engines currently being used.

Niki Lauda is reported to have been spotted at the Williams motorhome in the Monaco paddock, having made clear his view that a deal has already been struck that would see Williams joining McLaren and Force India as Mercedes customers next year - with McLaren's deal for a single season before it switches to Honda for 2015.

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Speaking to reporters in Monte Carlo, Mercedes motorsport chief Toto Wolff refused to confirm that any deal had been struck, but confirmed that discussions have taken place with teams - including Williams - as the German marque looks to firm up its long-term engine deals.

"It's clear that we are losing an engine customer in 2015, and for Mercedes it's important to have a regular business case," he said. "So it is important to have at least three customers from 2015 onwards. This is why we are having certain discussions with teams, and Williams is one of them."

Speculation suggesting that Williams could move away from Renault after two seasons has increased following the announcement that Toro Rosso will switch to Renault engines for 2014 alongside Red Bull.

Lotus and Caterham are also currently making use of Renault engines and are expected to remain on the roster next year, although there has been speculation suggesting that Lotus could be exploring other avenues due to the costs involved with the Renault supply.

Caterham by contrast is expected to extend its agreement thanks to the deal in place between the brands in relation to its road car division.