Bayern Munich are reportedly willing to allow Alphonso Davies to enter the final 12 months of his contract in what is a huge blow to Real Madrid's chances of signing the Canadian.

Davies only has a contract at Allianz Arena until June 2025, and Bayern have thus far been left frustrated in their attempts to convince him to pen a fresh deal.

Real Madrid continue to be heavily linked with the Canada international, and a recent report claimed that Los Blancos were preparing to step up their interest after securing a move for Kylian Mbappe.

Los Blancos are thought to be willing to spend €40m (£33.7m) on Davies, viewing that figure as fair due to the length of time left on his contract at Allianz Arena.

However, according to German journalist Florian Plettenberg, Bayern have now made a key decision on the left-back's future, which would see him stay at the club this summer.

Bayern 'could keep Davies this summer'

Plettenberg claims that the Bundesliga giants are willing to allow the 23-year-old to enter the final 12 months of his contract, which is allegedly a change of stance.

Bayern allegedly believe that Real Madrid are unlikely to make an offer despite the recent reports, and the club have not given up hope of convincing him to sign a new deal.

However, the German outfit are unwilling to meet Davies's demands over a new contract.

The defender is said to want €20m (£16.9m) a year to pen a fresh deal, which Bayern will not pay, but the situation is expected to be revisited if he enjoys a strong 2024-25 campaign.

Bayern have confirmed the signing of Hiroki Ito from Stuttgart, while Raphael Guerreiro is also an option at left-back, with Davies therefore facing strong competition for a spot next season.

How will the situation play out?

It had previously been thought that Bayern would be forced into a sale this summer, with the club not prepared to risk losing Davies on a free transfer considering his status.

However, the situation now appears to have changed, and it would not a surprise to see a new contract announced for the Canadian in the not too distant future.

Davies had his injury problems during the 2023-24 campaign, but he ended the season with three goals and six assists in 42 appearances in all competitions.

Real Madrid are not desperate for a left-back this summer due to the form of Ferland Mendy last term, meanwhile, so the Spanish outfit could hold tight, knowing that Davies may potentially become available on a free transfer next summer.