Recent speculation had suggested that the Italy international could leave San Siro in the mid-season window, after enduring a difficult first half to the 2013/14 campaign in Serie 'A'.
With Milan languishing in 11th place in the table, rumours started to gather pace that the 23-year-old striker could return to the Premier League this month, with Stamford Bridge identified as a possible destination.
Jose Mourinho knows Balotelli well from his time in charge of Inter Milan, and having been credited with an interest in adding a striker to his Chelsea ranks, is rumoured to be weighing up a Blues bid for the controversial front-man.
The Mail on Sunday also linked Gunners boss Arsene Wenger with a bid for bad-boy Balotelli, as Arsenal too are short on options in that area of the pitch, and reportedly on the lookout for striker reinforcements at the Emirates Stadium in January.
However, both Arsenal and Chelsea have been dealt a blow in their alleged pursuit of the outspoken AC Milan star - who would command a transfer fee of around €30million - after he reiterated his desire to remain in Italy, ahead of the 2014 World Cup in Brazil this summer.
"I remain at Milan," said Balotelli. "I must arrive at the World Cup feeling especially calm."