Atletico Madrid have admitted that their bid to sign Jose Antonio Reyes has reached an impasse after their failure to agree on a fee with Arsenal.
The Spaniards are understood to have offered é¼12 million (£8 million) for Reyes, but The Gunners are holding out for é¼18 million (£12 million).
"Our proposition was presented to Arsenal last week, but the English club have not moved forward," explained Atletico director of sport Jesus Garcia Pitarch.
"The situation is complicated by the financial differences between the two clubs."
Atletico's bid to land Reyes has been hampered by their failure to offload Martin Petrov, the player who would make way for the Spaniard.
The Bulgarian international winger has failed to settle in Spain since his move from Wolfsburg last summer and Atletico had been hoping to sell him on with the likes of Tottenham and Celtic both interested.
However, their failure to conclude a deal looks to have scuppered any move for Reyes, with Garcia Pitarch confirming they are now considering other, more affordable players.
"Now the operation has stopped and we are studying other options," he added.
City neighbours Real Madrid are also still interested in signing Reyes, but they too are unwilling to meet Arsenal's demands.
Real's latest offer is believed to have been a straight swap deal involving Robinho heading to Ashburton Grove in exchange, but that proposition is said to have been flatly refused by Gunners boss Arsene Wenger.