Isco is in talks with City about an end of season move, with his minders having met with the Premier League leaders in Madrid a fortnight ago.
The midfielder has also spoken directly with City boss Pep Guardiola and Diario Gol says the player's close friend, Morata, was raised during conversation.
Guardiola is in the market for a new striker after losing out to Manchester United in the battle for former Arsenal attacker Alexis Sanchez in January. And the City manager was told by Isco that Morata is unsettled at Chelsea. The pair remain close after Morata's departure from Real last summer and talk regularly.
Along with Isco, there are also some inside City who believe Morata would be a more value-for-money deal than Harry Kane, who is rated at €200m by Tottenham.