Nick Diaz could be back fighting in the Octagon early next year after a report emerged at the weekend that he is negotiating a new deal with the UFC.

Diaz has not fought since an unsuccessful welterweight title bid against George St.Pierre in March of last year and has rebuffed the UFC’s attempts to coax him back into the cage since, but it appears that the parties may finally be coming to an understanding.

“Ran into Nick Diaz last nite at Glory,” Sports Illustrated reporter Loretta Hunt mentioned on Twitter. “Good mood. Said he hoped to be fighting again by new year; trying to work out contracts now.”

So what could have tempted Diaz to return to the Octagon? It may well be that talk of a superfight with Anderson Silva did the trick.

At the start of this month Silva’s manager Ed Soares threw Diaz’s name out as a potential opponent for Silva’s eventual return fight after the leg break he suffered at UFC 168 back in December.

Diaz had already stated in the past that it would take a major fight with the likes of Silva to convince him to come out of his unofficial retirement, and has since indicated that he would be willing to fight him if the money was right.

Meanwhile, UFC president Dana White also appears to be on-board with the idea.

“If that’s what it’ll take to get Nick to fight again. I know [Silva’s team] wants it, so we’ll see what happens,” White stated at the UFC 174 post-fight press conference. “Anderson wants to fight Nick. Nick wants to fight Anderson. Why would I say no?”

The fact that Diaz is now talking about returning to the Octagon early in the new year – the same time as Silva has targeted for his return to action – means the smart money is now on this fight taking place.

It’s far from a done deal though. Things never seem to run smoothly when Diaz is involved and it remains to be seen if the UFC can strike a financial deal that satisfies him.

At the same time, Silva is still on the road to recovery after his leg break and was only recently given the thumbs up to begin sparring again. According to his doctor the former middleweight champion, now 39, will have to work on his mental game as much as his physical one, overcoming any potential mental block he may be experiencing as a result of the horrific injury he suffered.

If all the pieces of the puzzle fall into place though then the UFC will undoubtedly have their biggest fight since Silva’s last meeting with Chris Weidman in December which was watched by just over a million viewers on pay-per-view.

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Ross launched MMA Insight (previously in 2009 as a way to channel his passion for the sport of mixed martial arts. He's since penned countless news stories and live fight reports along with dozens of feature articles as the lead writer for the site, reaching millions of fans in the process.