Tottenham Hotspur's bid to sign Corinthians midfielder Paulinho looks to have hit a snag, after newly appointed Real Madrid boss Carlo Ancelotti sanctioned the Spanish club's interest in the Brazilian.
The Times reports how the former Paris Saint-Germain manager signed a three-year contract at the Santiago Bernabeu on Tuesday, and wasted little time in stepping up a £20million pursuit of the player.
Spurs boss Andre Villas-Boas will have been encouraged by Paulinho's enthusiastic comments about the opportunity to move to White Hart Lane, and having agreed a £17million fee with Corinthians, thought they were in pole position to secure his signature.
However, Tottenham could now miss out on the 24-year-old after Real Madrid's interest was made public, something which could prompt Paulinho to reconsider his transfer options.
Real Madrid president Florentino Perez has promised to back Ancelotti in the summer window, and will give him significant transfer funds to rebuild the squad he has inherited from Jose Mourinho.
Tying Cristiano Ronaldo down to a new contract will be high on the Italian tactician's list of priorities, but he can be expected to bring two or three new faces to the Spanish capital before the start of the 2013/14 campaign.
Paulinho is currently in Confederations Cup action with Brazil, and will not make a final decision on his future until after the tournament is finished.