Barca had been favourites to land the central defender.
Both Manchester United and Manchester City are set to go head to head at the end of the season in the battle to sign highly rated young Real Sociedad centre-back Inigo Martinez, according to reports in the Daily Mail.
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The Premier League duo are both known to be on the look out at present for a new central defender for next season, with City needing to replace the departing England international Joleon Lescott, while the champions are themselves hoping to land a replacement for club captain Nemanja Vidic.
And as a result, the two Premier League giants have sent scouts over to the Basque country in recent weeks in order to run their eye over the in-demand Spain international with a view to possibly landing the player when the summer transfer window opens again for business at the start of July.
Initially, it had been expected that the 22-year-old would be joining La Liga champions FC Barcelona, however, with the Catalan giants having been hit with a transfer ban earlier this week that prevents the club from buying any new players until September 2015, the path has now been cleared for both Premier League sides to make their own move for the Spaniard.