Sky Sports sources understand AC Milan have failed to reach an agreement with Manchester City regarding Carlos Tevez.
The defending Serie A champions' CEO, Adriano Galliani, was in England on Thursday to conclude the deal, but negotiations could not be successfully completed.
Galliani announced personal terms had earlier this week been agreed with Tevez and the end of a long-running transfer saga seemed to be in sight.
Milan, though, have seemingly failed to meet the demands of City and reports have suggested the Italian club's hands are tied as a result of Alexandre Pato's decision to snub Paris Saint Germain.
Inter Milan have also been interested in Tevez and news of the stumbling block between their rivals and City could reignite their pursuit.
The 27-year-old has not played for City since the Carling Cup game against Birmingham at the end of September.
His absence came after his now infamous refusal to resume a warm-up as a substitute against Bayern Munich in the UEFA Champions League.
Tevez was consequently the subject of an internal disciplinary process and City manager Roberto Mancini has since been keen for the striker to leave the club.