The US giant is expected to raise its offer for the Dairy Milk firm from 745p a share, valuing the company at £10.2 billion, to 800p a share, according to a Sunday newspaper.
It is also said to be in the final stages of putting a financing package together which would enable it to offer around half the sum in cash.
But Cadbury's shares closed at 800.5p on Friday, suggesting Kraft may have to offer more than 800p per share, with some analysts saying they may have to raise their bid to as much as 850p a share to be successful.
It is thought rivals Nestle or Hershey may also come forward and table a bid for the group.
It is understood that the Takeover Panel is this week preparing to set Kraft a 'put up or shut up' deadline, under which it must make a firm offer or walk away for at least six months.
A deal between Kraft and Cadbury, which is the world's second biggest confectionery firm behind Mars, would create a "global powerhouse" with annual sales of around 50 billion US dollars (£30.5 billion), according to Kraft.
The US firm has also sought to give assurances that a deal between the two would see jobs protected and possibly even created.
But Cadbury's chairman Roger Carr has said the offer "fundamentally" undervalues the business and is of "uncertain value" for Cadbury's shareholders.
He also dismissed the "unappealing prospect" of Cadbury being absorbed into "Kraft's low growth, conglomerate business model" in an open letter addressed to Kraft chief executive Irene Rosenfeld.
Meanwhile, it was reported that Cadbury is considering reducing the size of its chocolate bars to offset higher cocoa costs.
The company has already introduced smaller bar sizes abroad to keep prices below key levels which would deter buyers, according to another Sunday newspaper report.
It quoted the group's finance director Andrew Bonfield as saying: "In Australia, we've relaunched Cadbury's Dairy Milk in a new pack size.
"We were able to use price points and the promotional strategy as a way of actually realising higher prices without necessarily a headline price increase. These are the sorts of things we'll continue to look at as we go into 2010."
A Cadbury spokeswoman declined to comment on the report.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article