Butt departed United in 2004 as he searched for regular first team football in the peak of his career.
However, he admits that clubs such as Manchester City, Liverpool, and Arsenal had been after him.
"I remember when I was leaving United - when I knew it was time to leave - I got asked to join (Man) City off Stuart Pearce, he rang me up!" Butt told former team-mate Scholes on their Football's Greatest podcast.
"I said: 'I'll have a think about it.' But I knew: 'No, it can't happen.' I just wanted to get him off the phone, to be fair!
"There was no way I was going because of my dynamic in my house. My family life would have been... I'm all right. I'm out the way, but my brother and all that. It would have been a nightmare. I would never have been able to play for City.
"I got asked to speak to Liverpool - never gonna happen. Arsenal - never gonna happen. I knew my mind was set on Newcastle. So for me, the real rivalry thing for United would have been impossible. Liverpool was impossible, yeah. No matter what they were gonna give you."