Luka Modric is ready to formally request a transfer from Tottenham.
The Croatian midfielder had refused to put in a formal request after being told by Spurs he would be held until his contract runs out in 2016.
Now Tottenham are looking for up to £40m for Modric, 26, who is on holiday after Croatia's exit from Euro 2012.
United are keen on an all-cash deal while Madrid prefer a cash-plus-players arrangement.
Modric's agent has held discreet talks with Madrid and says a proposition will be made to Tottenham in the next few days.