Norwich have blamed Peterborough for "moving the goalposts" during negotiations for Craig Mackail-Smith's transfer.
The Canaries are keen to bring the prolific forward to Carrow Road to bolster their push for promotion but McNally revealed that the League One side asked for more money at a crucial stage in negotiations.
Chief executive David McNally told the club's official website: "I can confirm that we made an enquiry about the availability of a Peterborough player last Thursday.
"On Friday we were told what we would have to do to make it happen. After some consultation we agreed to their key terms but they then moved the goalposts and asked for considerably more money - a lot more than they originally indicated would be required to make the transaction happen.
"We had a further meeting this Thursday and we haven't been able to agree anything so it looks like it's not meant to be.
"But you never say never as who knows what might happen in the summer."