Newcastle United and Alexander Isak have broken off new contract talks.
With Arsenal monitoring developments, it has been agreed between Newcastle and Isak's agents to now "cease" negotiations over a new deal.
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The Daily Mail says Isak has pulled back as he wants to play Champions League football next season and would prefer to wait to see how Newcastle's season develops before committing to a new agreement.
Isak's current deal runs to 2028.
Newcastle management have privately conceded the club needs to start matching the ambitions of their best players if they wish to keep hold of them.
Watching on are Arsenal, where Sweden international Isak is admired amid their search for a suitable centre-forward addition.