Manchester City are keeping tabs on Isco's situation at Real Madrid.

City boss Manuel Pellegrini worked with Isco at Malaga and has been keen to tempt the midfielder to Manchester for the past two years.

Sport says Pellegrini has been encouraged by Isco's situation at Real, where he is expected to make way for James Rodriguez in Rafa Benitez's starting XI.

City chief Txiki Begiristain has been in contact with Isco's camp to confirm their interest.

Txiki is happy to wait until the final days of the market in the hope Isco's frustration forces him to seek a move away.