"Renault's Cyril Abiteboul and Helmut Marko of Red Bull are currently negotiating the compensation sum that will be around $8 million.
"Should Renault raise the money, Sainz will replace Palmer from Hungary and the French Red Bull junior Pierre Gasly will take over the seat at Toro Rosso," said the report.
There is some credibility to the rumour. In Austria, Red Bull chiefs publicly blasted Sainz for suggesting that despite his newly-signed 2018 'option', he might leave the Red Bull family.
And Red Bull mogul Dietrich Mateschitz said: "If a driver does not want to stay, even with a contract one should not force him to stay."
Even amid the rumours, Briton Palmer said he is committed to trying to up his game at Renault.
"I'm trying my best," he said at Silverstone.
"We're not even halfway through the year. Things are starting to click and hopefully the rest of the year will be a lot stronger."