Birmingham have admitted defeat in their bid to sign Nicky Butt before the end of the transfer window.
A fee had been agreed with Manchester United, but Blues co-owner David Sullivan claimed the midfielder needed more time to consider his future.
"He wants to stick it out at United until the summer before deciding what he wants to do," said Sullivan.
"I hope he will become a Birmingham City player eventually but it is a non-runner at the moment."
Sullivan added: "We were very close to matching the wages he is on at Manchester United and we were offering him a longer contract. I don't think that was the stumbling block."
"From his point of view, to have been at a club for his whole career and then rush a move through in a few days is very dramatic, and he wants more time to think about it."