Image copyright Getty Images Image caption James Murdoch joined the Tesla board last year.

James Murdoch could become the next head of Tesla's board of directors.

He is "the favourite" to replace Elon Musk, who currently serves as both board chairman and chief executive, the Financial Times has reported.

However, Mr Musk said on Twitter that the FT report was "incorrect" without providing any further detail.

Mr Musk agreed to give up the chairmanship last month to resolve claims of fraud brought by US financial regulators.

The settlement requires Tesla to install an independent chairman, among other penalties.

It is intended to create more oversight of Mr Musk, who provoked the charges when he claimed on Twitter that he had secured funding and might take the firm private.

The terms of the settlement with the Securities and Exchange Commission are awaiting court approval. A federal judge is due to review the settlement on Thursday.

The FT report cited two anonymous sources, but added that other names remain under consideration.

The New York Times had previously reported that Mr Murdoch's name had been discussed for the post.

Who is James Murdoch?

Mr Murdoch, the younger son of Rupert Murdoch, has served on Tesla's board since 2017.

He was one of two new members the firm appointed last year after criticism that the board - which includes Mr Musk's brother and a close business partner - needed to show more independence.

The appointment earned him $1.9bn in compensation, of which all but $10,000 came in the form of shares.

Mr Murdoch is currently chief executive of the US media giant 21st Century Fox, but he will step down after the firm completes the sale of much of its business to Walt Disney.

He resigned from the board of Sky this week, following Comcast's successful bid for the European satellite broadcaster.