The arrival of Bruno Guimaraes from Lyon in January was the headline signing for Newcastle and they are planning to bring in another Brazilian from the French club this summer.
Paqueta has been heavily linked with a move to Newcastle and he was recently spotted with Guimaraes in the North East, which further flamed the rumours.
Newcastle are said to be wary about the money it would take to snare the midfielder away from Lyon in the upcoming transfer window.
But according to Italian broadcaster Sportitalia, the club are still working on tabling a bid with Lyon for the 24-year-old midfielder.
Newcastle want to sign at least one headline-grabbing signing in the summer as well and, Paqueta is the favourite, with the situation claimed to be rapidly evolving.
However, there is still no agreement between Newcastle and the player or with Lyon at the moment.
The Magpies are in talks with the Brazilian’s agent over personal terms and they are suggested to be progressing well.
Once a deal is in place with the player, Newcastle will hope to negotiate a fee with Lyon this summer.