Wolfgang Gibowski told the Berlin-based DeutschlandRadio that the offer would be formally submitted when talks with lawyers representing the former labourers resume on Thursday.

Lawyers for the victims are seeking more than $20bn in compensation

Mr Gibowski denied that the companies were seeking a "cheap solution" to the dispute and said the amount on offer constituted "a very great deal of money".

Talks between the two sides resumed at the US State Department in Washington on Wednesday, five weeks after talks in Bonn co-hosted by the US Treasury ended without agreement.

There has so far been no official response from lawyers representing the plaintiffs, but in earlier comments they said they were seeking an offer in the region of $20bn. Any less, they said, would be insulting.

'Dignified offer'

Germany's chief negotiator Otto Graf Lambsdorff has described such an amount as "very far removed from reality".

On Wednesday he said the amount he would propose was "a justified, dignified offer".

Sixteen German companies are being asked to contribute money to a compensation fund.

The offer will be the first to be tabled by the companies' legal team after months of negotiations on how to compensate up to 2.5 million people forced to work for Nazi Germany.