Borussia Dortmund sports chief Michel Zorc conceded over the weekend: "We have spent the last five days talking to him and his agent; and as things stand he is not prepared to accept our extended contract offer.
"Shinji is not bluffing. He has a career path in his head and the fabled Premier League in his head. Let’s just wait and see what happens over the coming days and weeks."
United's interest has the Japanese media buzzing - and German football pessimistic over their chances of seeing him in the Bundesliga next season.
With his current deal expiring next summer, BVB offered to double Kagawa's wages to £40,000-a-week - which still fell well short of United's mooted £85,000-a-week proposal.
But the reasons behind Kagawa's stand goes beyond finances. Since childhood, growing up in Kobe, he's dreamed of playing in England.
His life has been football. After showing potential as a junior, Kagawa moved away from home - and his parents - at just 11 years of age to enroll in the Barcelona Miyagi soccer school. It was there where for six years his dribbling ability and creativity was encouraged and enhanced before landing a pro move to Cerezo Osaka.
His mentor in Japan, Akio Kogiku, reveals: "Shinji was the first player in Japan who had a professional contract before leaving high school.
"Shinji's parents have always told him he can do whatever he wants and they'll support him. His parents counted on me to guide him."
Kogiku speaks to Kagawa "once every two or three weeks" and believes his rapid rise in Europe can be put down to rejection by Japan for the 2010 World Cup.
"What I can never forget is his sad, wistful face when Shinji was not called to the squad for the 2010 World Cup."
Over his four years at Cerezo, Kagawa became a fans' favourite - and for all his success in Germany, he hasn't forgotten the support he received in Osaka. Kagawa has 100 seats at the club's stadium which are used to give underprivileged local children the opportunity to see Cerezo in action.
What impresses United manager Sir Alex Ferguson most about Kagawa is the way he's stepped up his game this season. Nuri Sahin's move to Real Madrid left an opening for Kagawa in BVB's midfield and he hasn't disappointed, inspiring them to a successful title defence.
BVB captain Sebastian Kehl said: "With the dribbling ability and movement he has, he's become very important for us. Indispensable."
Kogiku expects to take a call this week from Kagawa to discuss his next move. Adjusting to life in England won't faze him.
"He just loves football," says Kogiku. "He's quiet character, but also mischievous. A prankster."
But what about living in Manchester? And the English diet?
"No problem. Shinji isn't a picky eater. He'll eat anything - except tomatoes!"