Simon Cowell has been forced to do a dramatic U-turn after ITV told him they would not pay the £4 million required to release Louis and Sharon from their contracts and pay the cost of their replacements.
Louis and Sharon were reportedly informed last week that they would no longer be required,
Both Louis and Sharon are in the final year of a 3 year contract on X Factor with ITV.
A source told the Mail on Sunday: "Louis and Sharon have to stay. "Both made it clear they were going nowhere and they would fight for their jobs.
"Not only would the cost to get rid of them run into several million, so would the stars who would take over.
"It is just not a feasible option, they will be back alongside Simon.
"But the big issue here is that it means Simon can’t go young again, he can’t get a team of young talent in to appeal to a new audience.
"Instead, he will have to stick with what he has got. "He'll have to accept that his loyal audience is much older than he had believed."
A decision on the replacement for Nicole Scherzinger is still be to be made, with the source adding "The fourth position is very fluid. It is anybody’s right now but Louis has the best chance at the moment."
Decisions will have to be made soon as filming of the judges auditions start in June.