Real Madrid have broken off negotiations to buy Patrick Vieira from Arsenal, according to reports in the Spanish media.
Real’s move for Vieira reached stalemate over Arsenal’s demand for an extra £1.25m to pay a sell-on fee due to Cannes, Vieira’s first club.
Sources said the fee had gone up from 33m euros (£22m) to 38m euros (£25.5m) plus 5m euros (£3.4m) in bonuses.
There are also claims Arsenal have offered Vieira an improved contract. However, a move to Real would include a 25% cut in his wages. Madrid’s galacticos earn about £4m a year but Vieira is being offered a basic £3m.
Real could still force the deal through by increasing their offers to both Arsenal and Vieira.
Arsenal manager Arsene Wenger gave Vieira until this weekend to decide on his future.
He said: “Only Patrick can come out and clarify the situation now, and he needs to do that very quickly.”