Leicester held preliminary talks with Inter Milan over a loan deal for Christian Eriksen, but walked away when the cost of the deal became clear.
Sky Sports News has confirmed a report in the Daily Telegraph, claiming the Danish midfielder's reported £300k-per-week salary at the Serie A club hampered the Foxes' interest.
Eriksen's wages at Inter are thought to be almost three times what Leicester's highest earners make and the club's hierarchy are not willing to sanction a deal at that cost.
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The 28-year-old, who joined Inter from Tottenham in a £16.9m deal one year ago, has been linked with a return to the Premier League this month after being deemed "not functional" to Antonio Conte's project in Italy.
Nevertheless, a loan deal for a midfield player remains a possibility for Leicester in January, as they look to cover the hamstring injury to Dennis Praet which will keep him out for three months.
On Thursday, Sky Sports News reported Leicester were interested in the possibility of signing Real Madrid midfielder Martin Odegaard on loan when it first became clear that he will be allowed to leave in January.
But after preliminary discussions the club decided not to pursue him, leaving Arsenal and Real Sociedad in the driving seat as the race to sign the Norway international heats up.
The futures of Hamza Choudhury and Demarai Gray are closely connected with what Leicester can do in the loan market. If Brendan Rodgers can attract more cover, Leicester are more likely to allow both of them to leave.
Choudhury is a loan target for Newcastle and West Brom, while Gray - whose contract is up in the summer - is a target for a number of foreign clubs, including Marseille.
The winter transfer window is open until Monday, February 1 at 11pm.
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