The Mirror says City officials remain livid boss McLeish resigned from St Andrews earlier this month and was appointed Villa manager five days later. Villa are refusing to meet McLeish's £5.4million compensation clause - claiming he was a free agent having quit citing constructive dismissal.
But relegated Brum are determined to win their case and have this week sent final legal letters to Villa and McLeish demanding cash.
Birmingham chief Peter Pannu, an ex-Hong Kong cop and barrister, also has a writ against McLeish which he is ready to issue.
And he will proceed with complaints to both the Premier League and FA unless arch-rivals Villa cough up.