And with Real having failed to secure cover in midfield, one of the player's two agents, Marcelo Lombilla, is meeting with Real director general Jorge Valdano to try and resolve the situation.
"Lombilla is in Madrid and has met twice with Valdano but I do not believe that he will leave," Gago's other agent, Zoran Vekic, said.
"There is still a meeting pending, but I doubt that Madrid will let him join Manchester City because it is not a question of money."
Gago signing 'unlikely'
Sky Sports are having a busy old day, and there is yet another transfer story involving ourselves, and like the Adam Johnson one, it is not necessarily positive news: