Gaddafi's 39-year-old son has been on the run since the North Atlantic Treaty Organisation airstrike on the city of Sirte last Thursday that led to his father's capture and execution.
A senior official in the National Transitional Council, Abdel Majid Mlegta, said Saif and former intelligence chief Abdullah al-Senussi, the ousted tyrant's brother-in-law, had been trying to broker a deal through a third country, believed to be Niger, to hand themselves in.
Senussi is said to have fled into Niger and there were reports suggesting that Saif had also crossed into the country, the Daily Mail reports.
According to Xinhua, a Nigerien military source said, Saif al-Islam who is being sought by Interpol had tried to cross over to the Nigerien territory on Monday night in the extreme northern parts of the country.
Saif and Senussi are being sought by the ICC for committing crimes against humanity.
On Wednesday, the southern border area with Niger was the focus of an intense search operation said to include elite troops from Britain and Qatar.
The race is on to prevent Saif escaping over the border into one of Libya's neighbours, where other members of the Gaddafi clan have already found refuge.