The popstar, who has been on the panel at the Manchester auditions, has impressed producers and her co-stars with her feisty views and no-nonsense attitude, sources told Digital Spy.
"The other judges have loved working with Mel and Gary has said to producers that he thinks she is great," said a show insider.
"She has been really fiery and has strong opinions.
"Tulisa and Louis have also got along really well with Mel backstage. Tulisa and Mel are always giggling together."
Mel has previously starred as a judge on X Factor Australia and is currently the host of Dancing with the Stars Down Under, which may hold her back from taking the gig permanently.
Geri Halliwell, Nicole Scherzinger, Leona Lewis and Rita Ora have been the other guest judges on the UK X Factor 2012 audtions so far.
Halliwell is believed to have ruined her chances of landing the fourth spot on the panel with her auditions, while Scherzinger and Ora are thought to still be in the running.
The X Factor auditions continue later this month in Glasgow, Newcastle and Cardiff.