It is thought that Tottenham boss Harry Redknapp is now weighing up a bid in the region of £15 million for the experienced midfielder.
Diarra has already played under Harry Redknapp at Portsmouth before he joined Real Madrid in 2008 for £20 million.
The French international is said to have fallen out of favour with coach Manuel Pellegrini, which could spell the end of his career at Madrid.
It seems Harry Redknapp is wasting no time in trying to strengthen his side for another assault on the Premier League’s top four.
Only last week Spurs tied up a deal to sign Brazil youngster Sandro, who will arrive at White Hart Lane this summer.
"He is an outstanding young player who we feel has a great future," said Harry Redknapp.
“He is a strong and aggressive midfield player. We are looking forward to having him here with us next season.”
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