Tighter restrictions could be introduced in some areas, including a ban on any social contact outside households, under the traffic-light plan.
At red level three, the most serious, hospitality and leisure businesses would also be forced to shut, overnight stays away from home restricted and non-professional sports banned, The Guardian reported.
On Sunday the number of new cases jumped by 22,961 after Public Health England acknowledged the blunder, taking the UK total to 502,978.
As case numbers rise across the country, the three-tier “Covid-19 Proposed Social Distancing Framework”, dated September 30, has been drawn up and is yet to be signed off by Downing Street, according to the Guardian.
The draft document marked “official - sensitive” does not mention schools, which Boris Johnson has said would only close as a last resort.
But the “red” level contains far tougher local restrictions than seen so far, and could prompt a renewed backlash from Conservative backbenchers and local leaders.
The document reportedly says the Government’s Sage scientific advisory group has advised a package of clearer rules, rather than individual changes, would improve compliance, which is currently low.
“Preventing household mixing and closing businesses and venues in which there is close social interaction was recommended as the best way to reduce R,” it says, referring to the reproduction rate which must stay below 1 to avoid rapid spread.
The document says that alert level 3 would be “triggered in geographical areas or nationally when alert level 2 measures have not contained the spread of the virus, or where there has been a significant rise in transmission”.
At tier 2, people must not meet others outside of their household in private homes or gardens — except their support bubble — or in pubs, restaurants or other settings, mirroring current measures in northern England.
Visiting care homes would only be allowed in exceptional circumstances and travel should be limited to essential purposes, but holidays are permitted within households.
People could continue to play organised team sports, weddings would stay limited to 15 attendees and receptions banned, with funeral numbers slashed from the current 30 to 15 attendees.
Level 2 would be “triggered in geographical areas or nationally when there has been a rise in transmission, which cannot be contained through local responses”.
Alert level 1 contains restrictions currently in place across England, including the “rule of six” for gatherings indoor and out, the wearing of face coverings, and the 10pm curfew on hospitality firms.
Labour’s shadow health secretary Jon Ashworth welcomed the plans. “Vast swathes of the north of England and the Midlands are under a form of lockdown with a myriad of different rules applying,” he said.
“In recent days, Boris Johnson got himself into an utter muddle over these rules, confirming that the ad hoc way in which decisions are made causes confusion.”
Downing Street declined to comment. A Government source said it was an “early draft and proposals are still being considered by ministers”.