Premier League duo Manchester United and Chelsea are both set to suffer frustration in their pursuit of long-term transfer target Sami Khedira, with Real Madrid reportedly ready to offer the German international a bumper new contract to fend off rival interest.
Khedira has been consistently linked with both United and Chelsea for the past six months, with the Red Devils most active in their pursuit of the midfielder after having a formal bid knocked back last summer in a tough transfer window at Old Trafford.
United boss David Moyes is still thought to see Khedira as a viable option in a troublesome position at Old Trafford, but Madrid boss Carlo Ancelotti wants to keep the 26-year-old at the Bernabeu and has instructed chief Florentino Perez to offer the midfielder fresh terms, according to Spanish publication El Confidencial.
Ancelotti is the driving force behind this stance, viewing Khedira as integral to his plans to stick with a tried and tested 4-3-3 formation featuring two more disciplined, holding midfielders.
Madrid will reportedly increase Khedira's wages by £800,000 per year in an effort to persuade the enforcer that his future belongs in the Spanish capital, amid rumours that Arsenal are also monitoring his progress in an effort to increase their growing contingent of German stars.
Blues boss Jose Mourinho has a strong relationship with Khedira dating back to his time in charge at Madrid, but along with United it looks like Chelsea will have to turn their attention to other targets in the search for reinforcements.
Ancelotti is currently without Khedira for the majority of the campaign, after he picked up a knee injury on international duty that has left his participation at next summer's World Cup under considerable threat.