Manchester City chief Ferran Soriano is discussing personal terms with Malaga winger Isco.

The Daily Mail says Soriano has held talks with Isco's father, Paco Alarcon, and lawyers over a four-year deal, and is hopeful of signing the player for less than the £27m buyout clause that was put into the deal he agreed with the Spanish club in January.

The 21-year-old insists he is happy at Malaga but has accepted for some time that their financial problems mean he has to be sold.

City still face competition from Real Madrid but they hope the chance to work under his current boss, Manuel Pellegrini, will be a key factor in Isco's decision as Real's managerial situation is still uncertain.