Martin O'Neill has confirmed Manchester City are not currently prepared to match Aston Villa's valuation of James Milner.
City are keen to bring Milner to Eastlands before the start of the new season and had an offer rejected by Villa at the end of the last campaign.
The England international has subsequently informed Villa that he would like to leave and O'Neill is prepared to sanction his exit for the right price.
Reports claim Villa want £30million for the 24-year-old and O'Neill is waiting to see if City are willing to meet the asking price.
"At this moment, in terms of where we are with James, we don't really know," said O'Neill.
"The negotiations between Manchester City and ourselves are being conducted by our chief executive and owner and I'll be guided by them.
"The latest stage of play seems to be Man City feel as if they have gone as far as they want to, but we will wait with baited breath on that one."
Milner was left out of the friendly against Walsall on Tuesday night and the situation is similar to two years ago when Gareth Barry wanted to leave Villa to join Liverpool.
O'Neill believes the supporters want Milner to stay at Villa Park this season and remains confident the midfielder will give his all for the club if a move to City fails to materialise.
He added: "I think obviously the overriding opinion of all Villa fans is that they would love James to stay at the football club.
"But as I speak here now at this minute, my honest opinion, I cannot guarantee that but we will see.
"We had a situation a couple of seasons ago with Gareth and, of course, it doesn't help preparations, but that's the way it is now.
"If you can draw a comparison to Gareth, if the deal doesn't go through of course you feel a bit of a loss, but at the end of it Gareth settled down to play brilliantly for us in that final year and deserved his move to Manchester City as much as anybody after the years he had served."