Paris St Germain president Francis Graille has turned down an offer from Manchester United for Ronaldinho.
Ronaldinho is United's top summer target
Graille met Manchester United chief executive Peter Kenyon in Paris on Wednesday to discuss the possible sale of the Brazilian striker.
But Graille said the undisclosed offer had not been high enough, and revealed that he had also spoken to Real Madrid about Ronaldinho.
"Manchester United have made us offers, but the deal has not made any progress," said Graille.
"We are also in contact with another club, but for the moment Real Madrid have the advantage.
"I spoke about it with [Real Madrid president] Florentino Perez again on Tuesday."
Graille has put a price tag of £31m on Ronaldinho, believed to be more than double the amount Manchester United want to pay for the 23-year-old.
The Premiership champions are understood to have already agreed personal terms with Ronaldinho, who is under contract to PSG until 2006.
But Graille claims Real want to sign the player in a deal worth £24m that would see him stay at PSG for another season before moving to Spain.
PSG's hand has been strengthened by the announcement that French football's
financial watchdog, the DNCG, has lifted all sanctions on the club.
The DNCG had previously forbidden PSG to sign any new players due to their large debts.
But major shareholders, television company Canal Plus, have stepped in with a significant cash injection to help balance the books.
Ronaldinho's agent and brother Roberto Assis is still confident Manchester United can agree a deal with PSG.
"We are very calm, talks are ongoing," he said. "The player is not on the streets and he has proved his worth on the pitch so we will wait and see what happens.
"I am certain Manchester United will make another bid. It is important that we let the clubs find a possible solution."