The article adds that former Tottenham boss Martin Jol would be the most likely candidate to replace Hughes.
Jol spent a week deciding whether to quit Ajax for Fulham in July and eventually turned the job down but he has recently resigned from Alax and is available.
Fulham are far too close to the drop zone and Al Fayed had previously sacked managers Jean Tigana, Chris Coleman and Lawrie Sanchez as soon as the club looked like they were heading for relegation trouble.