Manchester City have decided not to pursue their interest in signing Arsenal Striker Alexis Sanchez.
The club have decided the cost of pursuing the 29 year old would be prohibitively expensive.
Manager Pep Guardiola, the club's owner Sheikh Mansour and other senior officials are all in agreement.
It is understood the wages being demanded by Sanchez would have put him ahead of all City's star men, something the club decided they would not do.
Manchester United are favourites to sign the Chile international after indicating they are willing to meet the Gunners' £35,000,000 asking price for the Striker.
Sources with knowledge of the situation say they understand Chelsea are also interested in the player.
They claim the overall package being negotiated is higher than the £60m for which Arsenal agreed to sell Sanchez to City in the summer.
City still believe Sanchez would prefer to join them, given his past relationship with Guardiola and the fact he pushed to join them in the summer.
However, they view it as highly unlikely Sanchez will drop his financial demands to a level that would allow them to resume talks.
"Guardiola stated in a press conference at Media City that he "was not being held to ransom by Alexis Sanchez's agent." So Pep Guardiola decided to pull the plug on the deal.