Manchester United are back in with a chance of signing Borussia Dortmund midfielder after Bayern Munich pulled the plug on a deal according to German newspaper Bild.
Dortmund confirmed last month that Gundogan has refused to sign a new contract with the club when his current deal expires in 2016, and he is likely to be moved on when the summer window opens.
Manchester United have been heavily linked with the 24-year-old in recent weeks however it seemed as though Bayern had stolen a march on the Premier League outfit and were close to wrapping up a deal - however Bild report that his wage demands have scuppered the chances of that happening.
The paper claims that Gundogan turned down a deal worth €6.5 million at Dortmund and Bayern have opted against offering more than that - meaning the race to secure his signature is wide open.
Bild say that the battle for his services is likely to be contested by Manchester United, Barcelona and Real Madrid. Barcelona are likely to be the Red Devils' biggest rivals in the upcoming transfer window, with Spanish newspaper El Mundo Deportivo reporting last week that the Catalan club have him on their list of potential replacements for out-going legend Xavi.
Dortmund sporting director Michael Zorc has denied that there has been any approach made for Gundogan despite his request to leave. "Ilkay told us he wants to leave this summer," the former Germany international told Sky Sport.
"But we have received no offers from any clubs for any of our players as of now. Every player always has to make decisions on their future but, for us, the intention is clear to keep Mats."
Manchester United are likely to spend big once more this summer and have also been linked with Gundogan's Dortmund team-mate Mats Hummels, although reports coming from Germany claim he's turned down a move to Old Trafford.
That could prompt a move for Valencia defender Nicolas Otamendi, who is one of many targeted for Van Gaal as he looks to replicate his £150 million spending spree of last summer.
Gundogan would be a shrewd signing for Manchester United - he'd come at the right price, the right age and with the right experience.
His injury record is of course the major concern but signing him won't break the bank so it's a gamble worth taking. Considering he is likely to cost less than half of Paul Pogba with a comparably small salary too then there's not much to lose.