Bernabeu starlet could be allowed to leave for Anfield or Ewood Park.
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Real Madrid midfielder Sergio Canales could be allowed to leave in the summer alerting Liverpool and Blackburn Rovers.
The 20-year-old joined the La Liga giants for £4million last summer from Racing Santander.
He is one of the most highly-rated youngsters in Spain and still has five years left on a contract, pushing his value up to £10million.
But the Spain U21 international has struggled to get regular first-team action after the arrival of Germans Mesut Ozil and Sami Khedira.
Madrid are unsure what to do with the youngster, who could leave on-loan, permanently or even stay at the club.
The news will be welcomed at Liverpool and Blackburn who have expressed interest in the midfielder previously.
Liverpool have made enquiries through director of football strategy Damien Comolli.
Rovers manager Steve Kean attempted to bring Canales in on-loan in January but Madrid decided to keep him until the summer.
The player’s father and agent, Angel Canales, says talks will take place at the end of the season.
“He wants to play here [Madrid] but in June we will speak with the club and find the best solution,” he said to Spanish media.
Canales has stated he is happy at Madrid and was pleased not to be sent out on-loan earlier in the season.
“I’m happy, I’m in Madrid and fighting to get some minutes,” he told Marca last week.
“Playing in teams like this is difficult, the key is to work hard. I have not proven myself yet.”