Gennaro Gattuso has emerged as the leading candidate for the vacant Tottenham head coach role after talks with Paulo Fonseca broke down.
Spurs had verbally agreed terms with the former Roma boss over a two-year deal, but negotiations between the two parties ended on Thursday and the club have decided to focus on other targets.
Sky in Italy say the deal has been scuppered by financial reasons, but sources told Sky Sports News the decision was taken by Spurs.
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Sky Sports News understands there were disagreements between Fonseca and Spurs also on the recruitment of his backroom staff.
Spurs' new managing director of football Fabio Paratici is a huge fan of Gattuso and considers it a more appealing appointment despite Fonseca topping their managerial wishlist last week.
Paratici also attempted to appoint former Chelsea, Juventus and Italy head coach Antonio Conte but talks broke down earlier in June.
Gattuso left Fiorentina on Thursday only 23 days after having signed on as manager.
Ex-AC Milan and Napoli boss Gattuso, who was not due to officially begin his tenure in Florence until July 1, has been in a dispute with the Serie A club regarding which players to sign this summer and has now terminated his contract.
Fiorentina wanted more affordable additions than those proposed by Gattuso's agent - Jorge Mendes - such as Sergio Oliveira from Porto and Goncalo Guedes from Valencia.
Spurs are still looking for a permanent replacement for Jose Mourinho, who was sacked by Spurs in April, just days before their appearance in the Carabao Cup final against Manchester City.
The club tried to lure Paris Saint-Germain boss Mauricio Pochettino back to north London a year and a half after his sacking, but were unsuccessful.
Spurs were led on an interim basis by Ryan Mason for the remainder of the season, with the former midfielder helping them to qualify for the inaugural Europa Conference League.
Proud Lilywhites 'will ensure fan voices are heard'
Spurs' LGBTQ+ supporters' association, Proud Lilywhites, say they are in touch with the club and watching the situation closely, in light of comments made by Gattuso in 2008.
"If the club make any appointments that are antithetical to our values, we will ensure fan voices are heard," Proud Lilywhites said.
As ever, it isn’t wise for us to comment on speculation. However, we can and do communicate supporter sentiment to the decision makers at the Club, and have done so very clearly on this occasion. We are aware of and acting on your concerns around potential managerial candidates.— THST (@THSTOfficial) June 18, 2021
"In the meantime, we don't think it's appropriate to comment on speculation. We're heartened to see such solidarity from our allies".
Gattuso previously said he disagreed with same-sex marriage.