Company directors who employ illegal immigrants could be struck off as part of Home Office reforms, it is reported.
Mr Reid has had to deal with a catalogue of crises
Those caught breaking the law twice would be disqualified and their profits seized, according to the Sunday Telegraph and the Sunday Times.
Home Secretary John Reid will next week announce his reform plan for the department he described as "not fit for purpose" when taking over in May.
But the Home Office said stories about the reforms were "highly speculative".
The Telegraph said the overhaul would include separating the Immigration and Nationality Directorate (IND) from the rest of the department.
The Home Office has been hit by a series of problems, notably the release of more than 1,000 foreign prisoners without consideration for deportation, which led to the sacking of Charles Clarke as home secretary in May.
The Sunday Times also reported that Mr Reid wanted to give police the power to impose control orders on gangsters in an attempt to thwart serious organised crime.
A Home Office spokesman said next week's announcements would focus on tackling organised crime, reforming the department and reform of the criminal justice system.
"At a later stage we will be publishing proposals to reform immigration policy, but these issues are currently under discussion.
"No decisions have been taken. Such stories are therefore highly speculative."