Skysports.com understands Hibernian have rejected a second bid from Birmingham for David Murphy.
Birmingham are keen on doing a deal for the left-back during this month's transfer window as they look to bolster their defensive options.
Blues boss Alex McLeish is thought to be a big fan of the former Middlesbrough youngster and is keen to bring him to St Andrews.
Murphy is seeking to leave Easter Road this month and has set his sights on a return to England.
Hibs rejected a £1million offer from Birmingham earlier this week for Murphy.
It is now believed Birmingham have increased their offer for Murphy to £1.5million as they look to push through a deal, but again Hibernian have rejected their offer.
It remains to be seen if Birmingham will up their offer further with a number of other clubs monitoring Murphy.