Man City convinced prising Higuain away from Real Madrid
The People says the Eastlands side also want to take Fernando Gago off Real's hands in a £45million double swoop.
Higuain was blamed for his side's Champions League exit in midweek after missing several chances - one of which left Cristiano Ronaldo visibly furious because he was better placed but did not receive the pass.
Tensions are now running high in the Real dressing-room and City know if one of the two players has to be moved on it will be Higuain looking for another club.
The 22-year-old, Real's top scorer with 17 goals, has been offered a new contract worth £90,000 a week but that falls way short of what Real's top earners pocket.