Juande Ramos wants £7.5 million from Tottenham following his dismissal on Saturday.
The Mirror says the Spaniard and his advisers are demanding 75 per cent of the remainder on his £4m-a-year contract, which was due to expire in 2011.
Spurs are left facing a total compensation bill well in excess of £15m for sacking Ramos and assistants Gus Poyet and Marcos Alvarez, as well as sporting director Damien Comolli.
Spurs chairman Daniel Levy must also fork out £5m to Portsmouth after appointing boss Harry Redknapp to save the crisis club from relegation.
Ramos' agent Gines Carvajal said: "The main question is to resolve the financial situation with Tottenham and then we can think about the future."