The 28-year old centre-back was set to join the R’s for a fee of around £9million but he has not agreed personal terms which has forced the potential transfer to stall.
However, Hughes feels the move could still occur with a week to go in the summer transfer window.
"At the moment [the Dawson move] is not where I'd hoped it would be," Hughes told reporters. "It may change.
"Obviously we've still got days left until the window closes so it might be revisited, but at the moment it is not in a place we think we can progress."