Source: Sharecast
According to Sky News, Marshall - a significant shareholder in GB News - had been reconsidering his interest in submitting an independent bid for the Daily Telegraph.
It cited its sources as indicating that Sir Paul could still submit an offer before the Friday evening deadline set by RedBird IMI, the Abu Dhabi-backed entity managing the sale, or could alternatively join a consortium bid if a suitable one emerges.
The potential withdrawal of Marshall, a central figure in the bidding process for almost a year, could impact RedBird IMI's efforts to recover the £600m it invested in a call option for the Telegraph titles.
Sir Paul reportedly finds the valuation implied by RedBird IMI's transaction excessively high.
Marshall had apparently secured financing from Ken Griffin, founder of hedge fund Citadel.
The publisher of the Daily Mail, DMG Media, meanwhile exited the auction last week due to concerns over a competition inquiry.
Other interested bidders included David Montgomery's National World, Lord Saatchi in collaboration with financier Lynn Forester de Rothschild, and Belgian media group Mediahuis.
RedBird IMI's plans to take control of the Telegraph were previously hindered by government intervention over concerns about foreign state ownership of national media assets.
The auction for the Telegraph came after Lloyds Banking Group seized its parent companies from the Barclay family due to unpaid debts.
Earlier this year, Raine Group and Robey Warshaw were appointed to advise on the sale's next phase, noted for their roles in recent high-profile deals in British football.
Sky News said a spokesperson for Sir Paul Marshall declined to comment, with Sir Paul himself stating he would not comment during the ongoing auction process.
Reporting by Josh White for Sharecast.com.