Two captured Britons accused of being members of the Islamic State cell nicknamed The Beatles could be sent to the US for trial after the UK dropped its usual demand for a guarantee that the death penalty would not be imposed.
Home Secretary Sajid Javid told US Attorney General Jeff Sessions that the UK would not demand a "death penalty assurance" in this particular case.
He also indicated that he believed there was more chance of a successful trial in the US than in UK courts.
Alexanda Kotey and El Shafee Elsheikh, are said to have been members of the brutal four-man Beatles cell of IS executioners in Syria and Iraq, responsible for killing a series of high-profile Western captives.
The pair, who are understood to have been stripped of their British citizenship, were captured in January, sparking a row over whether they should be returned to the UK for trial or face justice in another jurisdiction.
In the leaked letter, obtained by the Daily Telegraph, Mr Javid said the UK "does not currently intend to request, nor actively encourage", the transfer of Kotey and Elsheikh to Britain.
Promising support for the US, Mr Javid said Scotland Yard's counter-terrorism command had been "engaged extensively" on the case with the FBI, with the investigation running for more than four years "during which time they have engaged with 14 other countries and compiled over 600 witness statements".
But he added: "As you are aware, it is the long-held position of the UK to seek death penalty assurances, and our decision in this case does not reflect a change in our policy on assistance in US death penalty cases generally, nor the UK Government's stance on the global abolition of the death penalty."
Mr Javid also said US courts were better placed to handle "foreign fighter" cases because of the risk of legal challenge in the UK.