United remain Thiago's first choice, but Guardiola is monitoring developments and will not give up his pursuit of the talented midfielder. With little movement regarding a transfer, the Bayern Munich boss is preparing to return to his former club with a bid of his own.
Thiago's €18m release clause expires at the end of the month, which imposes a deadline of sorts on the prospective agreement.
United have reportedly assured the Spain under-21 international of playing time at Old Trafford - a key consideration for the young midfielder.
But the prospect of working with Guardiola again is thought to appeal to Thiago, and it would throw a spanner in the works for United if the German giants followed up their interest with a bid.
The report claims Guardiola is set to implement a 3-4-3 formation at the Allianz Arena - a tactical system that Thiago could flourish in.
And the Sport report also claims the Barcelona midfielder has resolved to leave the Nou Camp, following speculation he could change his mind and stay put.
The 22-year-old wants first-team football next season as he looks to cement a place in the Spain squad for next summer's World Cup.
He starred at the recent European under-21 Championships in Israel, but wants to work his way into the reckoning for a place in Vicente Del Bosque's team come June 2014.