Adriano Galliani says it is 'impossible' for Milan to meet Arsenal's demands for Emmanuel Adebayor.
Milan have made the Togo striker their top transfer target and had been favourites to sign Adebayor ahead of Barcelona.
Adebayor did little to clear up the confusion concerning his future last week, while there have been reports that Arsenal have rejected a £25million offer from Barcelona.
But, according to Milan vice-president Galliani, the Gunners want 45million euros (£35.8million) before agreeing to Adebayor's departure.
"The request for 45million euros by Arsenal is an impossible request," Galliani told the club's official website.
The Rossoneri are also still in the race to sign Barca playmaker Ronaldinho, who returned to action in an exhibition game last week.
Ronaldinho has been beset by injury problems in recent months and Galliani says Milan are now weighing up Barcelona's latest request.
He added: "Ronaldinho is an important player. We have noted the latest financial demands from Barcelona and we will evaluate them.
"I saw his last friendly. He was a 'little' overweight, but his talent is intact and he remains a great champion."