Leeds chairman Ken Bates has confirmed Manchester City agreed a fee for Fabian Delph only to miss out on the deal after requesting a week's delay.
City boss Mark Hughes confirmed their interest on Saturday, moving them into pole position for the England Under-21 international's signature.
However, Aston Villa moved ahead of their rivals to secure the 19-year-old as City surprisingly requested a week to mull over the deal, a position Leeds refused to grant.
"We had accepted an offer from Manchester City on Saturday which they had to go back with to the owner in the Gulf," Bates told Yorkshire Radio.
"Then apparently they needed a week to think about it which surprised us, considering the size of the deal.
"The problem was, that with a week, they might have come back and said 'no' and that wouldn't have been fair to Delph, wouldn't have been fair to Aston Villa, and would have eaten into our season.
"We went back to Villa, and it's a good decision for Leeds and the player.
"Martin O'Neill has a good record of bringing through young players. He believes in youth and hopefully Fab will get his chance sooner rather than later there."
Bates has confirmed manager Simon Grayson now has the funds to strengthen his squad following a fairly quiet close season at Elland Road.
"In the event that Simon wants to strengthen he can do so," he continued. "I have told Simon there is money available
"He turned around with the most honest answer I've heard from a football manager in 20-odd years and said 'I'm not going to let it burn a hole in my pocket, but it's nice to know it's there if I need it'.
"He acts in a very responsible manner which contributes to the club's stability. He does have someone he is close to bringing in and as soon as he does we will announce it."
That player could be Troyes defender Mathieu Baudry, with reports in France hinting a deal between the clubs has been agreed.
The 21-year-old defender has impressed Grayson on trial, with the Elland Road boss looking to broker a deal providing the fee is right for Leeds.