Millions of people will be asked not to travel outside their local areas and could be banned from mixing with other households, even outdoors, amid fears that some hospitals in the North-West could be overwhelmed within days.
This weekend, Downing Street was briefing mayors and council leaders on the planned three-tier "Local Covid Alert Levels" system of restrictions for England, expected to be announced by Boris Johnson on Monday.
Joe Anderson, the Mayor of Liverpool, said he was in discussions with Number 10 about placing the city into the third tier – with the toughest restrictions – amid mounting concern over the number of cases and the capacity of intensive care units at hospitals in the area.
The talks included discussions about deals that would give local leaders greater autonomy over measures and testing in their area in exchange for helping to enforce and explain the rules.
Plans for the third "very high" tier are understood to include guidance asking residents not to travel outside their area other than for specific reasons such as work or education. Local mayors said they expected pubs and bars in these areas to have to close, with restaurants able to remain open until 10pm.
In telephone calls with local leaders, Boris Johnson's aides also indicated that areas put into the third tier could face bans on multiple households mixing either indoors or outdoors.
Separately, Downing Street is inviting leaders whose areas are due to be in the "very high" tier to request the closure of specific types of hospitality or leisure venues, including beauty salons and sports centres.
That came after acknowledgement that the Government had not done enough to achieve "local buy-in" for some of the existing restrictions faced by areas with high infection rates in the North-East and the North-West.
Under the plans, the Government will retain the right to order local closures if necessary, but mayors and council leaders have been told that ministers want them to "co-design" restrictions to ensure that there is local consent for the new rules and that they can help to explain them to residents.
As of Saturday evening, there were a further 81 coronavirus deaths, according to the Government's daily figures, while an additional 15,166 people tested positive for the virus.
In other developments:
Matt Hancock, the Health Secretary, is said to have been shut out of several high-level meetings relating to Covid-19 amid concerns about leaks from Whitehall. A Department of Health source said it was "completely false to suggest the Health Secretary hasn't been present for the key meetings".
The Government could toughen powers available to councils to order the closure of businesses failing to comply with Covid-19 rules after Manchester City Council said it should be able to close any premises within 24 hours if it failed to comply with improvement notices.
Local councils are expecting to be given an increased role in local contact tracing, as well as more autonomy over where local testing units are located.
It emerged that coronavirus rates in university towns are over 40 per cent higher than in the rest of the UK, with infections in some student areas rising by up to 38 times since freshers' week.
Ministers are drawing up plans to expand the effectiveness of NHS Test and Trace to include a South Korea-inspired layer of "backward" contact tracing designed to identify "super spreader" events.
Traditional Boxing Day hunt meets across England and Wales have been cancelled amid fears that they will attract gatherings of spectators.
Under the "Local Covid Alert Levels" system, all areas of the country would be categorised as "medium", "high", or "very high" in a "traffic light" approach. Liverpool is expected to be first to enter the third tier and discussions are ongoing with leaders in Greater Manchester and Lancashire, where infection rates are also causing grave concern.
Sadiq Khan, the Mayor of London, who has been in regular contact with Mr Hancock, is understood to believe that additional restrictions in the capital are now highly likely. In practice, that would mean London being put into the "high" tier.
Large parts of northern England have already been hit with a range of additional curbs on social life, including a ban on different households mixing indoors, but the south has largely escaped stricter measures other than the national "rule of six" and the 10pm curfew for pubs and restaurants.
On Saturday, Jamie Driscoll, the mayor of North of Tyne, said: "It's notable that, at the start of this, the whole country was placed in lockdown when cases were at their worst in London. Now that cases are at their worst in the North, we are getting a very different response."
The three-tier system is meant to clarify the patchwork of rules for England that has evolved since infection rates began to climb again last month, but the proposal to allow local leaders to request hospitality and leisure closures in their areas would lead to a less uniform system than had been expected.
Saturday's talks, led by Sir Edward Lister, Mr Johnson's chief strategic adviser, came after Mr Anderson said: "The main point of the imposition of the measures are clearly that – imposition. We have not been consulted."
Amid discussions about local leaders taking a greater role, Andy Burnham, the Mayor of Greater Manchester, said: "We believe much stronger enforcement powers are what is needed.
"I'm talking about summary closures powers for premises that are not Covid-secure. And I'm not just talking about pubs or restaurants – I'm talking about shops or any setting where the right procedures are not in place."
On Friday, Rishi Sunak, the Chancellor, announced that the Government would fund 67 per cent of the wages of staff working for firms forced to shut by Covid-19 restrictions.
But in an open letter, Northern leaders wrote: "Earlier this year, the Government set its national furlough scheme at 80 per cent. We can see no justifiable reason why the local furlough scheme should be set at 67 per cent. To accept it would be to treat hospitality workers as second-class citizens, and we think that is wrong."
On Saturday night, Mr Hancock was accused of breaking his own curfew by remaining in a Commons bar beyond 10pm last week.
He also joked that Public Health England was "in charge of the payment methodology" – a reference to last week's testing data fiasco – "so I will not be paying anything" for drinks, The Mail on Sunday reported. Mr Hancock has denied claims that he broke the Government's pubs and restaurants curfew.
Meanwhile, epidemiologists have questioned the decision to charge football fans £15 a game to watch Premier League matches on television, fearing it could drive supporters to gather in pubs.