Sheikh Saqr's health "condition is critical, which poses a real problem of succession" for Ras al-Khaima, a source close to the royal family told AFP.
"Sheikh Khaled considers himself the legitimate heir and deputy ruler, saying he has in hand a 2004 decree by his father returning him to his position, a year after Sheikh Saud replaced him," the source said.
A copy of the alleged decree appears on Sheikh Khaled's website.
The source added that behind-the-scenes steps are probably being undertaken at the federal level to resolve the succession problem. Ras al-Khaimah is one of the seven members of the United Arab Emirates.
Sheikh Khaled, who has lived in self-imposed exile since 2003, has mounted a ferocious Internet campaign to regain his lost position, using his own website, social networking site Facebook and video hosting site YouTube.
Ras al-Khaima, which is poor in natural resources, has seen the development of important ceramics, pharmaceutical, and cement industries on Sheikh Saud's watch.
Portraits of the emir adorn the streets of the emirate of some 250,000 people, along with banners proclaiming fidelity to the crown prince.
Sheikh Khaled, who has recently returned to the UAE, remains undeterred.
His supporters have posted online videos of what appear to be expressions of support for him in Ras al-Khaimah, and pictures of him with US officials, including Secretary of State Hillary Clinton.
Sheikh Khaled has employed US firm Mercury Public Affairs to support his efforts to return to power.
Mercury has launched several reports to that end, including one entitled "Ras al-Khaimah: A Gateway to Trade with Iran" and another entitled "Ras al-Khaimah: A Rogue State Within the UAE?".
The first report alleges that there are numerous small companies with close ties to Iran in Ras al-Khaima's free trade zone, which are used to bypass sanctions.
The latter repeats the sanctions-busting charges, and says there are Iranian agents present in Ras al-Khaima.
It also alleges that Al-Qaeda used the emirate as a base to plan attacks, including an eventual one on Dubai's Burj Khalifa, which at 828 metres (2,717 feet) is the world's tallest building.
However, a Western diplomat, speaking on condition of anonymity, said there seems to be a consensus to keep Sheikh Saud as in power.
"Sheikh Saud has been in control for many years now and there seems to be a consensus between Abu Dhabi and Dubai for him to remain in power," the diplomat told AFP.
"The federal government is not interested in reviving old palace quarrels, which could destabilise the whole country and encourage similar disputes elsewhere," the diplomat added.
Gulf expert Neil Patrick, a visiting international relations lecturer at the University of Westminster in London, noted that Abu Dhabi has intervened in internal politics of some of the smaller emirates in the past.
"There is a history of Abu Dhabi playing a politically interventionist role in the leadership of some of the other emirates," he said. "It is possible that if Sheikh Khalid has a support of Abu Dhabi, he might be able to return to power."
But he added, "I would assume that it is mostly about Sheikh Khalid's ambitions, rather than the real possibility of him taking the leadership."