Inter Milan president Massimo Moratti claims Paris Saint Germain have lodged a €45million (£35.7million) bid for Sao Paulo starlet Lucas Moura.
Manchester United had been leading the chase for the Brazilian forward and have been in talks with his club and his representatives.
But the English giants have been unable to agree terms and now big-spending PSG look to have agreed to Sao Paulo's demands of a fee in excess of €40million - a figure United were unwilling to meet.
Inter were also very much in the bidding for Moura, but they too have baulked at the demands.
Now Moratti has stated that PSG, who have been tracking Moura for a number of months, have stepped up their interest by making a firm bid.
"Faced with such prices, we cannot compete. We have a different logic than that of Paris Saint Germain," said Moratti.
"In any case, there are no regrets that we didn't finish off the move, as the cost was already pretty high a few days ago.
"The €45m that PSG offered is completely illogical and for us it would've been very out of key with our approach.
"PSG are starting a new era, so they are completely reconstructing the squad. At least I can relish the fact I'm saving money.
"We were close to Lucas, for several days we talked about him, but honestly I never really believed in this deal, because it was too expensive.
"I have no regrets, the only certain thing now is that I saved money. (Bologna's, Gaston) Ramirez and (Catania's, Alejandro) Gomez as alternatives? There are many good players, but I don't choose the players."
Reports in Brazil have stated once Moura has finished playing in the Olympic football tournament a deal will be announced.
It is also claimed as part of the agreement with PSG - he would remain in Brazil until January, which also appealed to Sao Paulo.
Sao Paulo football director Adalberto Baptista told UOL: "I won't talk about this subject anymore because that's the fifth club the press say have signed Lucas."
The player's agent, Wagner Ribeiro, insists talk of a move to PSG is hugely premature, insisting it was paper talk.
"I am in Europe to watch the games," he told Terra.
"First they said Lucas was at Manchester United, now he belongs to PSG. Everyone is trying to build their story like a jigsaw puzzle."
However, Thiago Silva, who is currently with Moura in London for the Olympics, hinted he had talked to him about PSG and there was something happening.
"I did suggest him to Leonardo as he asked me," he told ESPN Brazil.
"I praised Lucas not because he plays with me, not because he is my friend but because he is a player that can contribute a lot to the national team. He is a skilful player that can decide in short space and finish quickly.
"Lucas and I have been talking since last week because I noticed something was reported on the press.
"Then I talked to Lucas to know what was going on. It's still open, they are still talking but it's not done."