The 21-year-old midfielder has struggled for first team appearances ever since moving to United from Crewe Alexandra back in 2012.
Powell has made just two appearances for United’s senior side this season, and Louis van Gaal is said to be open to loaning out the attacking midfielder to aid his development.
The England youth international’s career has stalled in recent times, as he has struggled to find a permanent home.
Powell has failed to make too much of an impression on loan spells with both Wigan Athletic and Leicester City.
Wolves and Forest both believe that he could enhance their teams though, and they are keen to take the creative midfielder on a temporary basis.
Any deal for Powell could be held up however, as he is currently undergoing tests to discover the severity of an injury he picked up while playing for the Red Devils’ under-21 side last week.