Dubai is in talks with the United Arab Emirates government over a loan facility that would make state funds available to companies as international sources of capital dry up.
The plan, one of several options under discussion by the authorities, would draw on support from the cash-rich federal government, bankrolled by Abu Dhabi, the capital that also owns 90 per cent of UAE oil wealth.
Dubai, which derives its wealth from its role as a port and trading centre, is at the tail end of almost a decade of strong growth but now faces declining real estate and stock markets, clogged credit markets and a collapse of oil prices, the main barometer of the region's economic health.
The emirate's ability to engineer a soft landing is vital for companies betting on the Gulf as a heaven of stability and a source of growth amid the global downturn.
The plan, which could be unveiled next week, would establish a facility for state-owned companies similar to a Dh120bn ($33bn, €26bn, £22bn) liquidity package for UAE banks announced in October.
According to officials in Dubai, the terms of the facility have yet to be defined but it would be likely to lend to companies that need help refinancing existing debt.
The economic crisis has highlighted the inter-dependence of the seven emirates that make up the UAE, and the crucial role of the federal government, which has at times been overshadowed by the rivalry between the trade and commerce hub of Dubai and Abu Dhabi, the oil town that now has its own ambitions to diversify its economy away from oil.
Concern over Dubai's high level of debt has fuelled talk that stakes in companies will be sold to Abu Dhabi. Fitch Rating Agency says Dubai's debt is at $70bn, more than 100 per cent of gross domestic product.
Citi said Dubai's exposure to real estate and debt made it the Gulf economy most vulnerable to the global economic downturn. The bank expects consolidation among Dubai's state-owned companies, rather than significant financial aid from Abu Dhabi, but says it will "pull through with some help".
Dubai officials insist that the emirate has enough internal cash resources to refinance the more than $20bn worth of debt due over the next couple of years. But merging Dubai companies or launching initial public offerings to raise cash, are also options being explored.
Dubai has also set up a high-level committee to steer the emirate through the crisis, and is expected to introduce measures to reassure investors in the property market, which is beginning to decline after years of steep price increases.