Inter Milan have rejected a loan offer from Manchester United for midfielder Matias Vecino, according to Sky in Italy.
The two sides could not agree on the conditions of the deal for the Uruguay international, who has been capped 41 times by his country.
Vecino has made 17 appearances in all competitions for Inter this season, contributing two goals and one assist.
The 28-year-old central midfielder could act as a short-term replacement for Scott McTominay and Paul Pogba while the pair endure time on the sidelines through injury.
Inter are now in discussions over a possible exchange deal which would see Vecino sign for Napoli and Brazilian midfielder Allan head in the opposite direction and join Antonio Conte's side.
Another of United's transfer targets, Bruno Fernandes, may not leave Sporting Lisbon until the summer, according to his agent Jorge Mendes.
The two clubs were understood to be close to agreeing a deal, but Sporting have since increased the overall asking price to £68m.
Meanwhile, Inter are hopeful of bringing in Tottenham midfielder Christian Eriksen. The Denmark international met with chairman Daniel Levy on Tuesday and reiterated that he wants to move to Milan in January.
Inter made a renewed £11m-plus-bonuses offer for Eriksen on Monday, but Spurs are holding out for their £17m valuation.
They are also in talks with Napoli striker Fernando Llorente, which could signal an end to their interest in signing Chelsea's Olivier Giroud.
Victor Moses has travelled to Milan to undergo his Inter medical, as the Chelsea wing-back is close to joining up with Conte again.
How to follow the January transfer window with Sky Sports
Sky Sports will bring you the very latest news from the January transfer market with the return of three shows.
Start your day with Good Morning Transfers at 9am as our team of reporters bring you the latest news and insight. Transfer Talk then follows at midday delivering analysis of the biggest stories. Then join us at 7pm for the definitive round-up of the day's news with The Transfer Show.
Meanwhile, the Transfer Talk podcast will also be back at the turn of the year with more expert analysis from here and across the continent.
And as well as tuning into Sky Sports News, don't miss a thing with our dedicated Transfer Centre blog.