The Sun says City are prepared to sue Tevez for up to £10million.
But Tevez, 27, is set to face a solicitor's letter himself, with City determined to go to war with their former captain.
Tevez's former club Corinthians offered to buy him for £40m in the summer - a deal that did not go through in the end because the Brazilian club could not come up with the money.
City see that offer as the benchmark for his true valuation.
Unfortunately, Tevez's antics and lack of football mean City would be highly unlikely to get an offer greater than £30m.
City are ready to sue Tevez for the shortfall, which the club claims is completely the player's fault.