Spurs had emerged as one of the front-runners to land the Brazilian midfielder, and reports suggested they were close to sealing a deal.
Paulinho himself admitted his agent is currently in London amidst rumours that he was attempting to thrash out a deal with Spurs.
However he also insisted that he will not make any decisions over his future until the end of Brazil's Confederations Cup campaign, which could be as late as June 30 when the final will be held.
Now Gazzetta are reporting that Inter have in fact already got an agreement in place to sign Paulinho, with Shakhtar Donetsk CEO Sergei Palkin seemingly backing up that claim.
"It’s true that we wanted to sign Paulinho," he said. But he has already signed a pre-deal with Inter Milan."
Paulinho is believed to have a €20 million release clause written into his contract that would allow him to speak to Spurs if they come up with cash.
Tottenham have also been linked with Paulinho's Brazilian team-mates Leandro Damiao and Bernard.