Real Madrid's general director Jorge Valdano has admitted the club could miss out on David Villa.
The Primera Liga giants had appeared set to make the Valencia man their third big-money signing of the summer, following record-breaking moves for Kaka and Cristiano Ronaldo.
A deal was reported to be in place, with the formalities expected to be tied up in the next few days.
However, the deal has hit a stumbling block and the Spain international now looks unlikely to be heading for Santiago Bernabeu.
Valdano admits as much, but insists an agreement could still be reached should both parties show a desire to reach a truce.
"We have been in talks to buy Villa the past week but there has been no agreement," Valdano said in an interview with Spanish radio station Onda Cero.
"What appeared to be well on the way to happening looks now to be falling through.
"If there is no accord we still have two or three more alternatives."
While Valdano has refused to rule out a deal for Villa, Valencia's sporting director Fernando Gomez Colomer claims the player is happy to remain at Valencia and has given no indication that he is seeking a summer exit.
"On the subject of David Villa, two points need to be clarified: Valencia has never concluded an agreement with a club for Villa's possible transfer and currently we have not received any satisfactory offer," he said.
"There have been foreign clubs interested, there have been offers. The player prefers to stay at Valencia."
Meanwhile, Valdano has also conceded that Real are prepared to end their interest in Bayern Munich playmaker Franck Ribery after being quoted an unreasonable price by his German employers.
"They don't want to sell him and that's why they quoted us an astronomical price," he said.
The likes of Lyon striker Karim Benzema and Liverpool midfielder Xabi Alonso remain targets for Real and Valdano is confident there will be more high-profile arrivals in the Spanish capital before the summer is out.
He has also admitted that approaches have been made for Dutch duo Wesley Sneijder and Arjen Robben, but claims the offers are the table fall well short of Real's valuations.
"There are interesting offers for some players but many of them do not want to leave," he said.