The source said Trump is being told by advisers not to fight Daniels' decision to break a confidentiality agreement because it would make him look guilty. By sending the money to Trump, it would involve the President - who has never acknowledged the agreement or the affair - in the case.
The alleged affair has become the latest distraction for Trump as he tries to advance his trade agenda and prepares for a proposed meeting with North Korean leader Kim Jong-un.
Cohen has said he made the payment with his own money.
Avenatti in a letter to Cohen, a copy of which was seen by Reuters, said the actress would wire the funds to an account of Trump's choosing by Friday.
Kwiatkowski wins Tirreno-Adriatico (2)
One of the favorites, Fernando Gaviria , touched the wheel of another cyclist and went down, taking others with him. Team Sky's Michal Kwiatkowski secured overall victory at Tirreno-Adriatico following the final stage time trial.
She also would be able to "use and publish any text messages, photos and/or videos relating to the president that she may have in her possession, all without fear of retribution and/or legal liability for damages", the Avenatti letter said. It was the first time the White House had admitted the President was involved in any way with Clifford. Reportedly, the two were involved in a secretive tryst, but Trump did not want news of his sexual exploits to eclipse his chances at becoming the nation's next Commander in Chief.
The White House referred the matter to Trump's personal attorney for comment.
BuzzFeed reported on Sunday that "lawyers associated with President Donald Trump are considering legal action to stop "60 Minutes" from airing" the interview. Larry Rosen, Cohen's lawyer, has not responded to multiple requests for comment. In exchange, the settlement agreement between Clifford, Trump and Cohen's company would be "deemed null and void in their entirety".