Lucas Moura's agent Wagner Ribeiro has claimed Manchester United are out of the running for the Brazilian's signature, after refusing to increase their bid.
Sir Alex Ferguson confirmed his interest in the player on Monday, but said the deal was far from done. Sao Paulo had said they had rejected a €35 million (£27 million, $42.5 million) offer from the Old Trafford club.
Reports suggested United were ready to increase their bid to €40 million (£31 million, $48.3 million), but now it seems United have pulled out of the deal after deciding not to increase their previous offer.
Ribeiro, confirmed as much, and now expects his client to remain at Sao Paulo for the foreseeable future. "They have reached their limit," Ribeiro told UOL.
"Lucas Moura won't leave. He is happy at Sao Paulo. We have to forget this subject. There is no possibility he leaves now.
"Manchester United made an offer, which was rejected and they won't make another one as they have reached their limit."
Moura was also linked with Inter Milan, but it is unlikely the Italian club will come anywhere near the transfer fee quoted by Sao Paulo.
With the Moura deal, looking like it is off, Ferguson might now increase his interest in signing wantaway Arsenal striker Robin Van Persie. United have put in an initial bid, which was rejected by the Gunners, but an increased offer might tempt their arch-rivals to accept, with Van Persie reportedly preferring a move to Old Trafford.
Meanwhile, Ferguson said he is impressed by the progress shown by new signing Shinji Kagawa in learning the language. The Japanese midfielder made a summer move from Borussia Dortmund, and according to the manager, has taken little time to settle into his new surroundings. "The thing that's impressed me is that every exercise we do on the training ground, he's never needed it to be explained," Sir Alex said of the playmaker.
"After one demonstration he joins in, as if he's known the language forever. We know he doesn't speak the language, but it isn't a problem.
"It just goes to show that a good footballer can pick up exactly what's needed. He's been fantastic in that respect."
England and United defender Rio Ferdinand also joined in praising the 23-year-old. "I've been very, very impressed," Ferdinand said. "He's quick, he's sharp, he has great awareness, he plays off both feet.
"I'm excited about playing with him and getting the season started. I think he'll be a great acquisition."
