The Scottish government has warned it could withhold almost £60m from the project Late on Monday the council said the city's Lord Provost was to convene a special meeting on Friday.
Councillors rejected plans to borrow an extra £230m to take the tramline into St Andrews Square.
At a meeting last Thursday, they instead backed the Labour amendment, deciding to end the line at Haymarket.
That provoked a furious reaction but the decision could not be revisited for 12 months unless there was a material change in the circumstances that led to the decision.
The first minister's intervention may represent such a change.
The £60m the Scottish government is considering withholding is the balance of its £500m investment in the scheme.
If ministers act on their threat that could undermine the economic case for the Haymarket option.
It is understood that the Liberal Democrat group on the council will press for a change of heart, urging colleagues on the council to take the trams on to St Andrews Square.
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