Louis van Gaal has ended Manchester United’s interest in Toni Kroos, in what represents the new manager’s first major decision regarding the rebuilding of his squad this summer.

The Bayern Munich midfielder had been pursued by David Moyes, Van Gaal’s predecessor, with the 24-year-old identified as being able to help solve the deficit in United’s central midfield department.

Kroos, who impressed in a deep-lying role when Bayern knocked United out of last season’s Champions League, has only a year left to run on his contract at the German club.

Yet despite his ability to also play in the No10 role or as box-to-box midfielder, Van Gaal, who is aware of Kroos’s abilities from his own time managing Bayern, has decided he should not be a target for the club this close season.

Paul Scholes, who was United’s last top-line operator in the position until he retired in 2013, believes Kroos should be the prime choice as the 20-times champions seek to re-establish itself as contenders.

“The first player I’d bring in is Toni Kroos. He’s a top-class central midfield player but United need five or six to get anywhere near the top of the Premier League again,” he told Paddy Power.

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Kroos’s current deal expires next summer but Bayern are still playing hardball over a new contract offer. Their president Karl Hopfner said: “There will certainly be further talks. But at some point the player has to say what he wants,” Hopfner said in an interview with Kicker magazine. “We will not exceed certain financial boundaries.”

Hopfner pointed to the case of Michael Ballack, who left the club for Chelsea in 2006, as a similar example. “It was the same with Michael Ballack and at some point we withdrew the offer.”