France international William Gallas is expected to stay at Chelsea after club chief executive Peter Kenyon met with his agent to resolve their contract dispute.
The defender had looked to be on his way out of Stamford Bridge in the summer after being unable to agree a new deal but may be about to make a U-turn and commit to the club for the long term.
According to reports in France, Gallas' agent met for showdown talks with Kenyon during the World Cup and the two parties were able to thrash out a new contract for the 28-year-old.
The news will be a blow to Milan, who were hoping to benefit from Gallas' failure to agree a new contract and may now have to turn their attentions elsewhere with reports suggesting the stopper will still be wearing the Chelsea shirt next season.
Meanwhile, Jose Mourinho is expected to up his bid to sign a new left back during the summer.
The Portuguese tactician is still hopeful of bringing Real Madrid's Roberto Carlos to Stamford Bridge but may turn his attentions to Lyon full back Eric Abidal if a deal for the Brazilian falls through.
The French international has been attracting interest from a host of European clubs after some impressive displays during the World Cup followed up a solid showing for Lyon last term.
Milan, Barcelona and Real Madrid are also reportedly interested in the French international and much could depend on Roberto Carlos' location next season.
If the Brazilian joins Chelsea, Real will step up their chase for Abidal, otherwise, The Blues would be his likely destination.
However, Lyon are reluctant to allow the 27-year-old to leave the Stade Gerland and may be about to offer the left back a lucrative contract to stay with the French champions.