The South American country booked the final place in the 2018 Fifa World Cup after beating the All Whites 2-0 in a playoff series last week.
With Fifa making it clear that it is against state involvement in football, the report suggests that the Peruvian team could be excluded from the World Cup as a result.
FIFA would then have the freedom to choose whoever they deem appropriate to slot into the vacancy with World Cup Regulations stating: 'If any association withdraws or is excluded from the competition, the FIFA Organising Committee shall decide on the matter at its sole discretion and take whatever action is deemed necessary.
As the All Whites were eliminated by Peru, it would appear they would have a better chance of being the team selected.
Peruvian congresswoman Paloma Noceda has proposed new legislation which would place Peru's football association under control of the nation's institute of sport.
"The FIFA Organising Committee may in particular decide to replace the association in question with another association".
Despite qualifying for Russian Federation undefeated, friendly stalemate specialists England have dropped three spots to a 17-year low of 15th, while Italy, who failed to qualify for a World Cup for the first time since 1958, have leapfrogged Gareth Southgate's team - going from 15th to 14th.
Colombia, who finished one position below Peru in the Conmebol qualifying table, could be another team in line to replace Peru in the unlikely case they are barred.
The New Zealand Herald reports that the US could also be in the mix due to financial reasons, with America's Fox Sports paying AU$512m to televise the 2018 and 2022 World Cups.
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