Benitez’s contract expires at the end of the season and he has yet to commit his future to the club.
How Newcastle could line up next season if Benitez stays
Where Benitez could go if he leaves Newcastle this summer
Discussions are understood to have been going on for more than 18 months and he is still waiting for answers on certain requests from the board, according to Chronicle Live.
The Sun report that the manager will be armed with more than £50million a season to spend.
In an interview with Newcastle managing director Lee Charnley, following the release of their accounts, he said the club want to ‘invest and strengthen’ in the summer.
He said: “Our accounts are pretty simple. We’ve got turnover less our wage bill and other operating costs.
“And broadly speaking that gives us what we have to spend in a year. It’s not difficult to do the maths – that’s what we have to spend.
“In addition to that, you then have the funds generated from player sales.
“We would look to spend our budget on a small number of high-quality players, rather than dilute the money over so many.
“We’d then look to supplement this with loans. We want players that can make a difference and improve the team.
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“We want to be competitive at every level and in every competition.
“The idea we turn up every year just hoping to survive just isn’t correct.
“We want to improve – but do so sustainably.”
Newcastle’s surplus figure was £58.7million at the end of the 2017/18 season and it is expected to be around £50million over the next two years.
Charnley wants quality over quantity of players, which means that they could break their record signing.
They paid £21million for Miguel Almiron in the January transfer window.
One of the players believed to be high up on Benitez’s wish list is Salomon Rondon, who is currently on loan from West Bromwich Albion.