AC Milan winger Rafael Leao has rejected approaches from both Chelsea and Real Madrid, according to the Gazzetta Dello Sport.

The Italian newspaper claims that the two teams held talks with his agent Jorge Mendes but Leao has instructed his entourage to continue negotiations with Milan over signing a contract extension.

At the moment, talks over a new deal are at a standstill, with Milan unwilling to pay the €20m that Leao owes to previous club Sporting Lisbon.

The Portuguese international has been ordered to pay compensation due to breach of contract but he wants the money to come from Milan, rather than his own pocket.

It was reported in Portugal earlier this week that Chelsea had discussions with Sporting to better understand Leao’s situation ahead of a potential bid. However, it appears the player has his heart set on remaining in Italy at the moment.  That could, of course, change if Milan’s position on paying Leao’s fine doesn’t shift.