At a media conference launching ‘The Daily’ digital newspaper on Wednesday, and eagle-eyed attendee claims to have spotted a working prototype of Apple’s second-generation iPad 2, notable by its front-facing camera. A report from Reuters is backing up the claims after a source with knowledge of the device confirmed its existence, and also suggested that the finished model could boast other features.

Describing what the eyewitness spotted at the News Corp conference, the Reuters report says, “what appeared to be a working model of the next iPad with a front-facing camera at the top edge of the glass screen.”

For a company as secretive as Apple about unreleased devices, it’s a surprise for many that a prototype iPad 2 was out in the wild at such a public event. A handful of Apple employees, including iTunes chief Eddy Cue, were at the event that saw the debut of the world’s first iPad-only newspaper, but it’s unclear from the reports whether it was a member of Apple’s staff carrying the device. Both News Corp and Apple have declined to comment.

A variety of rumors surrounding the second-generation iPad have been a popular topic as the expected launch date of the device draws closer, however, suggestions of a front-facing camera have certainly been the most popular. If the reported sighting is as genuine as it sounds, the promise of a camera-equipped Apple tablet later this year is almost guaranteed.

Without spoiling the party and ruining the hopes of many, it’s a good idea to bear in mind that features present in a prototype device don’t always make it to the finished product. Before an update to Apple’s iPod touch a couple of years ago, prototype models and parts were discovered that lead us to believe the device would launch with a camera. However, it wasn’t until the following year that a camera featured in the device.

Is the presence of a camera in Apple’s next iPad a must-have for you? Let us know you thoughts in the comments.