Everton have pulled out of the deal to sign Dutch international Leroy Fer.
The Toffees agreed an £8.6million deal with Twente earlier this week, but issues emerged with the transfer after the player arrived in England and had a medical.
The two clubs continued talks, but now the deal has been called off after Everton backed out.
Speaking exclusively to Sky Sports News, Everton chief executive Robert Elstone explained the reasoning: "We were very excited about the prospect of a young international Dutch player coming to Goodison, and the combination of a lot of hard work we thought we had the player.
"But the transfer did not go smoothly and there were some issues and, as our fans would expect, we have to put the club first, and as our track record proves, we thought long and hard about it but it did not work out.
"We have to be very careful about how we spend our money."
Elstone insists that they are still looking for new signings and could still make a deal before the transfer window closes on Thursday.
"We are still looking and there are other options for us and I refer back to our track record, and as any club we do have other options and it will not be for the lack of trying," he insisted.