Durham are in talks with South Africa batsman Jacques Rudolph with a view to him joining the club for the 2013 season.

Rudolph has lost his national contract with Cricket South Africa and an improvement in Durham's financial situation has raised the possibility of Rudolph coming to the Riverside for the new season.

Geoff Cook, Durham's head coach, had said earlier this month that Durham's "financial situation prohibits any signings" but news of a new funding arrangement with the local council appears to have precipitated a rethink.

Rudolph would prove an experienced signing having played 48 Tests and enjoyed several seasons in county cricket, chiefly with Yorkshire for whom he has scored 5,429 first-class runs at 52.20. He also played five matches for Surrey at the beginning of last season.

Durham have just agreed a funding deal with Durham County Council which will see them lent £2.8 million - an investment the council have been forced to defend after announcing budget cuts of £200m and 1,600 job losses.

The council have cited an independent report which revealed internationals at Durham could add £40m to the local economy over three years. The investment will be used to develop the ground with a view to securing regular international cricket.

"For a number of years, the club has been investing and investing, building and building," Clive Leach, the club's chairman, said. "This has been essential and has allowed us to secure international cricket at Durham, culminating in last year's announcement that we will be holding an Ashes Test Match here this summer. This really was a massive achievement.

"Our work has also played a significant part in us winning two championships and attracting the stadium's Emirates sponsorship, which was a huge deal for us.

"However, we need to demonstrate local stakeholder support to ensure we have the wherewithal to build upon the work we have undertaken already, make international cricket a permanent fixture here in Durham and leverage that status to bring investment into the club.

"We believe that, with the financial support we have been afforded, we can do just that and, as a result, develop the club into a profitable, community focused business and realise the benefits of the 'long game' we have been playing."

Cook had previously welcomed the club's decision not to bring in new players. "I don't think that is a bad thing," he said. "The last thing we want is for short-term signings to prevent development. There is nothing more de-motivating for young players than new people to be brought in ahead of them in the queue. I'm confident the young payers we have given responsibility will really prosper."