Real Madrid are interested in signing Málaga attacking midfielder Isco, according to the club's director Francisco Aguilar.
The 21-year-old Spain international has scored eight goals in 35 Primera Division appearances so far this season, and is also generating interest from Manchester City and Paris St Germain.
Isco signed a new contract with Málaga in January to keep him at the club until 2016, however he has a buy-out clause of €35 million (£30million).
Málaga director Francisco Aguilar told Spanish newspaper Marca that Real are keen on Isco, but a deal is still a long way from being confirmed.
Isco is one of the outstanding young talents in Spanish football
"Real Madrid are interested in signing Isco, but nothing is official yet," Aguilar said.
"It fills us with pride that a lad who has come through at Malaga has become the player that he is now.
"If he leaves Malaga it will be to a big club and it will be to the benefit of the coffers at Malaga. Clubs that want him will have to meet his buy-out clause."
Madrid were denied permission to speak with PSG coach Carlo Ancelotti about succeeding José Mourinho at the Bernabéu.
Málaga coach Manuel Pellegrini yesterday announced he would leave the club at the end of the campaign and is destined to replace Roberto Mancini at City.