The Sunday Mirror says City pulled the plug on the deal late on Friday night after refusing a request from Barca president Joan Laporta to once again extend a deadline for the transfer to be concluded.
The Catalan club, desperate to sell Eto'o to the Blues to help fund their own £35m move for Valencia's David Villa, spent yesterday trying to resume negotiations with City's hierarchy. But chairman Khaldoon Al Mubarek was adamant City were no longer interested in Eto'o.
A City insider said: "The decision to end negotiations with Barca for Eto'o is not a bluff.
"Khaldoon felt negotiations had reached a dead end and it was time to draw a line under the episode and concentrate on other targets.
"Khaldoon is not the kind of man to make U-turns once a statement of intent has been made public.