The Foreign and Commonwealth Office (FCO) has reportedly said a US woman does not have diplomatic immunity following the death of 19-year-old Harry Dunn.
Mr Dunn died when his motorbike crashed into a car outside RAF Croughton in Northamptonshire on August 27.
The suspect, 42-year-old Anne Sacoolas – who is reportedly married to a US intelligence official – was granted diplomatic immunity following the crash.
But the Foreign Secretary Dominic Raab has written to Mr Dunn's family about Mrs Sacoolas and, according to the BBC and Sky News, has said: "The US have now informed us that they too consider that immunity is no longer pertinent."
"We have pressed strongly for a waiver of immunity, so that justice can be done ... Whilst the US government has steadfastly declined to give that waiver, that is not the end of the matter," the BBC quoted Mr Raab's letter saying.
"We have looked at this very carefully ... the UK government's position is that immunity, and therefore any question of waiver, is no longer relevant in Mrs Sacoolas' case, because she has returned home."
An FCO spokesman told the PA news agency that the office "would not be commenting further on the content of the letter".
Meanwhile, Mrs Sacoolas's legal representative Amy Jeffress, from the law firm Arnold and Porter, said: "Anne is devastated by this tragic accident.
"No loss compares to the death of a child and Anne extends her deepest sympathy to Harry Dunn's family."
It comes as Mr Dunn's parents Charlotte Charles and Tim Dunn said they would be flying to the US to "put pressure on the US administration to do the right thing".
Radd Seiger, who is representing Mr Dunn's family, told ITV News he had spoken to Mrs Sacoolas's legal team "very briefly" over the phone after arriving in the US on Saturday.
He said: "We have agreed to meet each other at the earliest possibility as soon as we can coordinate our diaries."
It is the first contact between both parties since Mrs Sacoolas left the UK.
Mrs Sacoolas's lawyer said: "Anne would like to meet with Mr Dunn's parents so that she can express her deepest sympathies and apologies for this tragic accident.
"We have been in contact with the family's attorneys and look forward to hearing from them."
The lawyer said Mrs Sacoolas spoke with "authorities" at the scene of the crash and met Northampton police at her home the following day.
"She will continue to cooperate with the investigation," the lawyer said.
On Friday, the Prime Minister said America was "absolutely ruthless" in its safeguarding of Mrs Sacoolas following the decision to grant her diplomatic immunity.
Boris Johnson said although President Donald Trump was sympathetic towards Mr Dunn's family's views on the use of diplomatic immunity, the US is "very reluctant" to allow citizens to be tried abroad.
Speaking of taking their campaign to the US, Mr Dunn's family said in a statement that they "continue to live in a nightmare" and have so far been unable to grieve after his death.
Mr Dunn's family are due to fly to the US on Sunday, ITV News reported.
A statement released on behalf of the family said: "As if losing Harry was not enough, they now find themselves having to expend enormous time and energy, which they can ill afford, generating sufficient publicity to garner public support to persuade the US government to help achieve closure and return the driver Mrs Sacoolas to England to face the consequences of her actions."