Reports from Milan claimed that a deal for Ronaldinho had been agreed with Barcelona amid suggestions that a salary of £5million-a-year had been offered. But that is at least £100,000-a-week less than City are prepared to pay.
That may explain why Spanish radio last night reported a fall-out between Milan's chief transfer negotiator Adriano Galliani and Ronaldinho's agent and brother, Roberto de Assis. While Milan hold the upper ground in the transfer negotiations - Ronaldinho would rather play for the Italians - they cannot match Thaksin Shinawatra's financial power.
City's pay-as-you-play salary offer is being supported by at least one major sponsor, with Nike prepared to back the deal. Deal insiders say that Milan must still remain favourites, but City are refusing to give up the chase.
"They are refusing to be bullied out if it by Milan," a source said last night. "You have to admire their daring and their audacity. They still have hope that this could be possible."