Negotiations have been under way in recent weeks between the assembly government and Mr Murphy
BBC Wales Political Editor
First Minister Rhodri Morgan is expected to agree to a recommendation to narrow and redraft a key piece of legislation on affordable housing.
Welsh Secretary Paul Murphy is believed to agree with MPs on the Welsh affairs select committee to restrict the power requested by the assembly government.
But it's understood Plaid Cymru assembly government ministers are refusing to accept a narrower bid.
It is the latest stage of an increasingly heated row about powers.
Mr Morgan has told Welsh Secretary Paul Murphy, who has a veto over the process, that he accepts the bid for power is wider than originally intended or requested by the assembly government but did so without consulting his full cabinet, including coalition partners Plaid Cymru who hold the housing portfolio.
Plaid are pushing for the assembly government to demand the full set of powers to be devolved but the strong indications are that Mr Murphy intends to refuse this.
The assembly government wants the authority to suspend the right-to-buy option for council tenants, saying this will help with the supply of social housing stock.
But their bid for a Legislative Competence Order - LCO or Welsh law - in this area included acquiring the power to go further and abolish the right-to-buy option.
It was drafted in a way that would enable future assembly governments to amend or even scrap the system in Wales.
Assembly ministers said they had no intention of abolishing the right to buy but MPs on the Welsh Affairs Select Committee recommended the proposed LCO should not be allowed to proceed unless the abolition power is removed.
They said the assembly government should only get the powers they had requested to carry out the pledge in the One Wales agreement which created the coalition between Labour and Plaid to temporarily suspend the right to buy in an area of extreme housing pressure.
They suggested that the bid for power would have led to the assembly government getting more power than it had intended to request. The assembly government deny there is any drafting error.
The order has become a touchstone issue in the increasing tension between Cardiff and Westminster - the presiding officer of the assembly Lord Dafydd Elis Thomas, has accused the MPs on the committee of "anti devolutionist tendencies" over their demand for the order to be redrafted.
While they don't have the power to redraft the legislation, the Welsh secretary Paul Murphy has the power of veto - unless he approves it, it cannot go forward into parliament, become law, and see the powers in this area devolved to the assembly.
Negotiations have been underway in recent weeks between the assembly government and Mr Murphy about whether the order should go forward.
The first minister's been under significant pressure from Plaid Cymru as well as many of his own back benchers to stand firm on the wider order.
It's seen as a symbolic line in the sand in the LCO process. Many are concerned at the precedent a narrowing at the behest of the MPs might have for future orders - with a bid to devolve powers over the Welsh language to the assembly still in the pipeline, and likely to provoke intense debate.
It had been expected that the situation could lead to a stand off between the Welsh Secretary and the assembly government, especially since the Under Secretary of State for Wales Wayne David gave a conference last week a strong hint that the Wales Office was minded to reject the bid for full powers.
A spokesperson for the Welsh Assembly Government said: "We don't recognise this version of events. Constructive work and discussions are ongoing with regard to the suspension of the right-to-buy LCO."