Forlan's hopes of joining Atletico Mineiro have been dashed after the Brazilian club baulked at the Inter striker's wage demands.
"It was impossible to reach an agreement with the lad," said President Alexandre Kalil on Globoesporte. "He would earn 10m over two seasons at Inter, but we cannot possibly guarantee him similar figures here."
There had been reports that Atletico Mineiro proposed 2m per season for a three-year contract.
"There was no deal with Forlan. We negotiated, but could not reach a compromise. Our fans might want him at all costs, but we cannot go beyond our means."