Gonzalo Higuain has turned down a new contract offer from Real Madrid. Sport says the Argentina striker has rejected Real's second round offer, which still falls well short of what the player is seeking.

Higuain is Real's top scorer and third in the Liga, but remains among the lowest paid of the senior squad on around €900,000-a-year.

The striker's agent has a bumper offer from Manchester City, which has Real nervous. While Higuain still has over three years to run on his deal, which carries a buyout clause of €150 million, Real management know they risk unsettling their star striker unless they can get close to his demands.