The former Ibrox director is prepared to resume a role at the club in return for certain provisions being met, principally full access to the club's financial details.
Craig Mather, the Rangers chief executive, and the finance director Brian Stockbridge met King in South Africa on Monday to discuss the possibility of him returning to Rangers. The Glasgow-born businessman will only invest when the time is right and knows that the money will be going straight into Rangers for the club's benefit, most likely as part of a fresh share issue.
His return needs board approval, though, and that will require the assent of James Easdale, a non-executive director of Rangers International Football Club, and his brother, Sandy, who sits on the football club board, who own or have proxy over almost 25% of the club's shares, as well as the other director Bryan Smart.
The London Stock Exchange announced Ian Hart has resigned from the Rangers board today.
Ally McCoist would welcome the return of King since he has a lifelong affinity for Rangers and a record of investing in the club. King put £20m into Rangers when Sir David Murray was owner and after resolving issues with the South African Revenue Service, is free to invest at home and abroad without restriction.
"I believe the board deserve credit for making such an effort to attract someone like Dave King back," the Rangers manager said. "This is a clear message they are trying to do their best for Rangers. Someone like Dave King has already invested vast sums of his own money and that tells me he's the kind of investor we need again. The recent accounts have been well documented and the fact is we need reinvestment at some stage.
"If we are going to get that, it would be good to get it from someone who has definitely the best interests of the club at heart. Dave King has and clearly the board also believe that to be the case. The fact a member of the board has flown to South Africa for talks would indicate they also feel it would be hugely beneficial to have Dave back on board. It can only be a good thing for Rangers. The board have a difficult and important job to do and it is encouraging to think we are talking to someone who could help move the club forward."
The board is under pressure, with fans' protests gathering momentum, and a group of shareholders seeking to replace all directors at the annual meeting on October 24. On Monday, a Court of Session hearing will judge whether the board's attempts to block the nominations of Paul Murray, the former Rangers director, former chairman Malcolm Murray, and businessmen Scott Murdoch and Alex Wilson are valid or not.
Former Rangers chairman Alastair Johnston has also welcomed King's potential return. Johnston facilitated his friend's investment under Murray, and believes he has the credentials to help, but does not think King will return unless he has some control. "I'm not sure how much authority the chairman [position] has right now," Johnston told BBC Scotland. "If Dave can't see the chairman is anything more than a figurehead I don't think he's going to be interested. The care and attention he pays to the financial matters would serve Rangers well. Whether he would come into the circumstances where he doesn't have a great deal of control as part of an investment is only one he can analyse at this point in time."
Johnston urged the Rangers fans to make full use of the forthcoming annual meeting to ask questions of the current directors, who will all be up for re-election. He also backed Paul Murray for a return to the board for "credibility with the financial institutions", and said that Walter Smith's decision to stand down was made to reveal the extent of the problems within the club.
"Walter brings heart, passion and credibility, and by walking away he demonstrated the seriousness of the situation," Johnston said. "He wasn't running away because people were firing at him. By what you're doing and how you do it, you're transmitting a message."