"We have met all relevant people outside UTI...Now we need to sit and formalise the recommendations. There will be nothing (in the recommendations) which can shatter investors' confidence," a source close to the panel said.

The decision to not insist on the declaration of net asset value is significant considering that as many as 39 of the trust's schemes have shown negative reserves totalling Rs 2,014.631 crore. US-64 alone accounts for 54 per cent of the total negative reserves, with a widely reported negative reserve of Rs 1,098.49.

Finance minister Yashwant recently went on record to say that the government would not let the Unit Trust sink. Sources saythat the trust will maintain a 20 per cent dividend on its flagship scheme this year at the behest of a directive from the finance ministry.

The trust has, meanwhile, stepped up the sale and repurchase prices of US-64 units ever since the media went to town about the erosion in the scheme's reserves. For instance, the trust has hiked the repurchase of the scheme's units by 10 paise in January.

"We have had a close look at the US-64 portfolio. Something needs to be done for those securities which have lost their market value substantially. This can be done through floating another scheme and by transferring a part of US-64's underperforming equity portfolio. This will be replaced by debt securities with a higher income-generating potential or maybe by seeking government guarantee," said another source.

There is unanimity among the panel members that the rescue operation needs to be undertaken on a war-footing. "There is no time to waste. The panel will submit its recommendations before the end ofDecember," sources said.

The panel is in favour of restructuring the scheme by reducing its dependence on equity and improve its ability to maintain dividends to unitholders. As of now, the fund in overweight in equity (around 68 per cent of investible funds), while its basic attraction to investors is as a fixed-return income scheme.

"The gap between the promised return (a tacit 20 per cent) and the earning capacity of the scheme has to be filled in. Ultimately, US-64 has to transform itself into a debt-oriented fund. The scheme is heavily tilted in favour of equities. Taking into account these two aspects, the committee is considering the proposal for floating a new scheme. This is the best possible way of saving it," sources said.

Industrial Development Bank of India chairman GP Gupta and former State Bank of India chairman MS Verma are among the members on the six-member panel.