Ralf Schumacher thinks it is "possible" Sebastian Vettel will ultimately accept Ferrari's rumoured offer of a one-year contract for 2021.
Earlier, it was claimed that the quadruple world champion had turned down the offer, which reportedly involved a substantially slashed retainer.
But former F1 driver Schumacher says Vettel may ultimately accept the deal.
"Last season was of course not quite optimal," he told Germany's Sky Sport HD.
"Ferrari is currently going through a difficult phase and of course are trying to optimise everything," he said. "So I believe that something like that (contract) is possible, especially in these times."
Schumacher acknowledged, however, that Vettel may also decide to leave Ferrari.
"The question is whether he wants to go for the world championship or does he want to build something new," he said.
"McLaren is on the right track, so that would be possible, but they are also quite some way away. They also have an imminent change of engine, so it's difficult.
"I think if he stays there (Ferrari) for a year, he would be in good hands," Schumacher added.
"Of course he has to feel supported by the whole team. Once you no longer feel that you are being supported, a driver has to leave that team," he said.
Another former driver, Christian Danner, also tips Vettel to stay in red.
"In times of crisis, continuity is important," he told Bild. "Ferrari has enough to do right now, so stability is needed at least on the driver side."
