Aaron Ramsey reportedly verbally agreed terms on a four-year deal with Arsenal prior to the club withdrawing the offer.
The Gunners' longest-serving player is expected to leave the Emirates Stadium at the end of the season when his existing contract expires.
Talks between Ramsey and Arsenal have been ongoing for a number of weeks, but it looked as though they would reach a positive conclusion as the Welsh midfielder favoured staying in North London over joining a new club.
BBC Sport suggests that the 27-year-old even shook hands on the latest offer tabled to him, but Arsenal pulled the plug without saying why.
As things stand Ramsey, who joined Arsenal from Cardiff City in a £4.8m deal a decade ago, will have the option of signing a pre-contract agreement with a foreign club from January 1.
Juventus, Lazio and Barcelona are rumoured to be among the foreign clubs coveting Ramsey's signature, while Chelsea and Manchester United are among the English clubs to have been linked.
