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Swansea City have been handed a transfer blow after Atletico Madrid's Nicolas Gaitan rejected a move to the struggling Premier League side.

Reports in Spain this morning , backed up by Spanish football expert Guillem Balague , state that the Argentine has said no to a move to South Wales, despite Swansea and Atletico striking an agreement over a transfer.

The Spanish big-hitters want Gaitan gone this month; he hasn't played a game for the La Liga giants since November, and are open to both a loan move and permanent deal.

Manager Diego Simeone said this about the 29-year-old and fellow player Augusto Fernandez amid rumours of exits this month: "Augusto and Gaitan? The club are doing their best to finalise the squad for January.

"If Augusto has a chance [of moving elsewhere] and it’s good for him, I’ll be happy because he gave us his heart from the place he had to be. Every time a player has given us their life, I’m the first to open the doors to them. As for Gaitan, I’m waiting for him to make a decision."

Gaitan has an offer on the table from Mexican side Monterrey, but he has rejected that opportunity, too.

Boca Juniors and Zenit have also expressed an interest in the midfielder, but nothing has progressed past interest.

Reports emerged in the national press last week stating that Huw Jenkins had made a personal call to Gaitan and was prepared to offer the playmaker £120,000 a week to convince him to join the Liberty side.

But the player remains unconvinced, with a deal now looking unlikely.

It is a blow to Swansea who have yet to add any new players to their squad ahead of a massive survival battle to stay in the Premier League.