Paulinho has impressed at the Confederations Cup which is currently underway in Brazil, and caught the eye as Corinthians beat Chelsea in the Club World Cup final in December.
Tottenham have been heavily linked with a move for the midfielder in recent weeks and appeared to be closing in on sealing the deal when Paulinho confirmed his agent was in London.
Both Roma and Inter Milan are believed to keen on securing the 24-year-old's services - and now Real Madrid have joined his growing list of suitors according to Marca.
The paper report that Spurs were close to agreeing a fee in the region of £15 million, but now Corinthians will demand his full £17 million release clause is met in light of Madrid's interest, by either club.
Madrid boss Carlo Ancelotti is said to an admirer of Paulinho and will try and push a deal through if and when he is announced as Madrid's boss in the coming weeks.
Spurs will hope new technical director Franco Baldini will be able to convince Paulinho White Hart Lane is the right place for him to develop should he opt to leave Brazil after the Confederations Cup.
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