The new Real Madrid manager, Carlo Ancelotti, has refused to sanction the sale of central defender Pepe, delivering a blow to suitors Manchester City.

City were already resigned to failing to sign him. The situation could offer a reprieve to Joleon Lescott, whose desire to stay at the club is tempered by a need for Premier League starts ahead of the 2014 World Cup.

City are progressing moves to sign the Sevilla striker Alvaro Negredo, though frontman Pablo Osvaldo is not heading to City, despite suggestions that they are closing in on the Roma player.