Guti is set to reject a move to Blackburn Rovers and stay with Real Madrid.
Guti looked set to leave the Bernabeu after declaring he wanted to move and even said farewell to the fans after their last home game of the La Liga season.
This prompted Sam Allardyce to put together a bid to entice Guti to Ewood Park and he even enlisted his former Real team-mate Michel Salgado to join the charm offensive.
Allardyce was confident of beating off competition from Zenit St Petersburg and Galatasaray to land the 33-year-old midfielder.
But the news from Spain that Guti wants to stay at Real for a 16th season is a big blow to Allardyce.