DTI Secretary Stephen Byers last week made the strongest suggestion to date that parental leave will become paid, following a review this autumn.
Unpaid parental leave of up to 13 weeks was introduced on 15 December last year. It applies to all parents with children under the age of five, born after the implementation date.
Launching the review of parental leave and maternity pay at the conference organised by New Ways to Work on 9 May, Byers stated repeatedly that the argument for making parental leave paid will be closely considered.
He further fuelled speculation by telling delegates that restricting the right to children born after the implementation date, a move the Government has been criticised for, would make it easier to pay parents taking time off.
"We looked at whether it should apply to children born after that date or to all children under five and we decided on the former," he told delegates.
"The TUC feels we have misinterpreted the directive. We feel that we have interpreted it correctly. On whether it should be paid, it may make it easier for the Government to look more sympathetically at paid parental leave."
Employers are opposed to paying the leave, as even unpaid it is a major cost burden to business.
Government figures put the cost of unpaid leave at £35m. Independent think-tanks predicted it would cost £300m if paid.
The consultation paper is due in the autumn.