The 'Tragedy' group - individually known as Claire Richards, Ian 'H' Watkins, Lisa Scott-Lee, Lee Latchford-Evans and Faye Tozer - reformed last year with the intention of embarking upon a UK arena tour and releasing a fourth studio LP.
However, Sony is believed to have told the five-piece that they do not want to fund another record, forcing them to shop around for a new label.
"They've instructed their management to widen their ideas and talk to other labels," a source told the Sunday Mirror. "Universal is top of their list.
"They want a new album off the ground. It's a case of finding the right label to take the risk."
An Ultimate Collection of Steps' greatest hits topped the UK album chart back in October.
The band are currently filming a second series of their Sky Living documentary.
Watch Steps talk to Digital Spy about their reunion below: