The Citizens proposed an offer of £40 million for Spurs right-back Kyle Walker, but Tottenham want at least £50 million in order to let the England international join Pep Guardiola at the Etihad.
After the signings of Bernardo Silva and Ederson, the Spanish manager has set his sights on his prime transfer target, but has seen his efforts thwarted as the valuations made by each club are £10 million apart.
Dani Alves is also expected to join on a free transfer, but Pep Guardiola will not let off in his pursuit for the Tottenham defender.