Chelsea are set to lose out on the signing of talented playmaker Isco, after Malaga revealed they were on the verge of agreeing a new contract with the player.

It was understood Chelsea had a deal in place to bring the 20-year-old Spanish international to England in the summer, after securing first refusal for the winger following the loan move of Lucaz Piazon.

Isco has a release clause of €21 million (£17.6 million, $27.8 million), inserted in his current contract, and Chelsea were thought to be ready to trigger that in the summer.

However, it now seems like the might have their work cut out , with the release clause, if there is going to be one, set to be increased after Isco pens the new deal.

"We will be here presenting Isco very soon. We will be here shortly to announce the renewal of his contract," Malaga's director of football Mario Husillos said. "It's not renewed as yet, but I think it will be very shortly. We understand it is virtually a done deal."

Husillos, however, did offer a couple of words of caution, knowing how quickly things can turn around when it comes to contracts and transfers.

"There are no sure things in football," he added. "Everything can change in an instant. The club's intention and what Isco has stated is that he is going to stay here, he's going to renew his contract.

"Isco has really taken off. He's a great player and they want him at a number of clubs. He's a Spanish international. We intend to keep him at Málaga for as long as possible.

"Everyone wants to improve and if he continues growing like this, he'll have to go to a legendary European club. That's understandable.

"Life can also throw up a lot of surprises. That is the most conclusive statement that the club can make on the issue."

Meanwhile, former Chelsea manager Jose Mourinho, who is expected to take over at Stamford Bridge next season, admitted he had been offered the Real Madrid manager's job during his time with the Blues.

Mourinho joined Real from Inter Milan after a highly successful season with the Italian champions.

"I had the opportunity to come here in 2006 or 2007," he told RMC Sport. "I was at Chelsea and I couldn't have said yes at the time.

"When they came back a second time, it was very difficult to say no.

"It was a moment that everyone at Inter understood would be hard for me to refuse. Everyone was crying, but they opened the door for me.

"It was difficult for me too but I wanted to have this experience. There are positive and negative things (about it), like at all clubs.

"I'm glad I came here and, having had the opportunity to win competitions in Spain, I'm glad to have had this experience."