Isle of Wight Council bosses have overturned a vote by councillors - who had rejected the partnership to secure £900 million of funding.
Fans' Group Named As Preferred Bidder
Portsmouth's administrators have nominated Portsmouth Supporters Trust (PST) as their preferred bidder to take over the npower League One club.
Administrators PKF have been seeking a new buyer for the club since it was placed under its control in February with debts of £61million.
Trevor Birch, PKF partner and joint administrator of Portsmouth, said in a statement released to Press Association Sport:
''After extensive discussions over the past few weeks, we have today nominated Portsmouth Supporters Trust as the preferred bidder for Portsmouth football club.
''We will be working with the Trust, the Football League and the Professional Footballers' Association to conclude the sale of the club as soon as possible.''
PST's emergence as the favoured bidder appears to rule out Balram Chainrai's claims that his company, Portpin, will be the club's new owners.
The Hong Kong-based businessman spoke out last week to deny claims that the Football League had expressed concerns over his suitability.
He said in a statement:
''Our discussions with the Football League have been positive and are progressing.
''As far as we are aware we have satisfied the majority of the criteria and we expect now to work through the last remaining points with the Football League in the coming days.
''We are very confident that we are in a position to complete the acquisition of Portsmouth Football club in the near future.''
Chainrai was at the helm when Pompey went into administration in 2010 and it is thought he could have been involved when they were placed back in administration eight months ago.
The rules of the Owners and Directors test stipulates that a person who has twice been involved with a club going into administration cannot become an owner or director.
Despite the PST's new position as the administrators' preferred bidder, it is likely Chainrai will contest any takeover as he is owed #18million by the south coast club and holds Fratton Park as security.
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