Verizon has reportedly asked for a $1 billion (£805 million) discount on its Yahoo takeover after the firm admitted it suffered a data breach.

Sources told the New York Post that the tech giant demanded the discount on the $4.8 billion (£3.9 billion) price after it was revealed 500 million customers’ details were stolen in 2014.

Yahoo blamed the breach on a state-sponsored actor. An insider later claimed as many as three million records may have been stolen, but the firm denied this.

Its reputation was further damaged last week, when it was revealed that it had scanned users’ emails for terrorist signatures for the US intelligence services.

The revelations hurt Yahoo’s standing in the technology community, with cyber security expert Graham Cluley going as far as to urge users to close their accounts.

Neither Yahoo nor Verizon has commented on the reports.

“In the last day we’ve heard that [AOL boss] Tim [Armstong] is getting cold feet,” the anonymous source told the Post on Thursday. “He’s pretty upset about the lack of disclosure and he’s saying, ‘Can we get out of this or can we reduce the price?’”

The 500 million users’ Yahoo account details, which were stolen in late 2014, included names, email addresses, phone numbers, dates of birth, hashed passwords and security questions and answers, but no payment information.

One of the biggest questions hanging over the incident is over how long Yahoo’s leaders knew about the breach before they decided to inform customers, the authorities and Verizon.

“We understand that Yahoo is conducting an active investigation of this matter, but we otherwise have limited information and understanding of the impact,” said a Verizon statement back when the breach became public.

“We will evaluate as the investigation continues through the lens of the overall Verizon interests, including consumers, customers, shareholders and related communities. Until then, we are not in a position to further comment.”

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