Pearce, the current England U21 manager is seen by the FA who have been tasked with sorting out the side which will only be made up of English players due to the FA's of Northern Ireland, Scotland and Wales wanting to keep their independance, as the man for the job.
The team may take some of England U21's fixtures in the run up to the Olympic Tournament which is not a FIFA ranked one, and General Secretary Alex Horne told the BBC: "The current arrangement is that it would be an English team representing the British Isles.
"The British Olympic Association have said that it is not acceptable as it stands because it is prejudicial, so we are working through an alternative selection process.
"My agenda for the next three months or so includes serious conversations with the other home nations about the Olympic team because we need to get that right.
"We are all aware there are individual player issues. There are home nation sensitivities. So we need to work that through with the other home nations."
More information http://news.bbc.co.uk/sport1/hi/olympic_games/9358722.stm