Manchester City have cooled their interest in Fred, which could pave the way for rivals Manchester United to sign the Shakhtar Donetsk midfielder.

City had appeared in pole position to land Fred this summer after being unable to complete a deal for the Brazilian in January.

But the chances of Fred, 25, joining the Premier League leaders are understood to have receded and there is a possibility he could now join United instead.

With Michael Carrick retiring at the end of the season and Marouane Fellaini uncertain to stay with his contract expiring in June, United manager Jose Mourinho is in the market for at least one midfielder this summer.

Asked about Fred’s future on Tuesday, Sergei Palkin, the Shakhtar chief executive, confirmed the £40 million-rated midfielder would leave the Ukrainian club this summer and said he expected he would move to Manchester.