The Mirror says England star Richards has been offered even better terms by owner Thaksin Shinawatra and the latest deal is worth £50,000-a-week and rising.
Shinawatra told Richards he rates him so highly that he is personally behind the latest proposed increase in his salary - but still it has not worked.
The astonishing package for the teenage international has risen steadily in recent weeks, but some of his closest advisers think he could yet pick up £75,000-a-week at City or elsewhere.
Richards had a poor game at Chelsea on Saturday and City are becoming concerned the wrangling over his deal is affecting his form.
The outstanding prospect is also coming to the end of his contract with his agent and that is adding to the intrigue behind the scenes.