Manchester City have been warned they will have to complete the signing of James Milner by Wednesday or face the prospect of the England international remaining at Aston Villa for the rest of the season.

Talks between City and Villa remain ongoing, as they have been for most of the summer, but Milner has now become so exasperated with the speed at which negotiations are being conducted that he is no longer willing to continue playing with his future shrouded in doubt. City have been told that unless they can reach an agreement with Villa within the next 24 hours, Milner will remain in the Midlands and close the door on the summer's longest transfer saga.

Milner's frustration lies with City rather than Villa and he has started to question just how badly the club want to sign him because of the delay in pushing the deal through. The transfer has been held up at City's end because of Stephen Ireland's settlement demands – the midfielder has a little under four years remaining on his contract and has asked for a £2m payoff – but Milner feels that he is being placed in an unfair position by being asked to keep waiting until that situation, which has nothing to do with him, is resolved.

The 24-year-old, who was outstanding for Villa against West Ham United on Saturday when he scored the third goal in a 3-0 victory and left the field to a standing ovation, believes he needs to set a deadline to bring matters to a head. He remains hopeful there will be a breakthrough tomorrow, but if that is not the case, he will board the plane to Austria with the rest of the Villa squad on Wednesday morning for their Europa League play-off first leg against Rapid Vienna on Thursday.

Villa's hierarchy have already given Kevin MacDonald, the club's caretaker manager in the wake of Martin O'Neill's resignation, the go-ahead to pick Milner for the Rapid Vienna game. "If we were going to stop him playing, then we should have stopped him playing in the Premier League because there's probably more chance of him getting an injury in a Premier League game because of the physical contact," MacDonald said.

"If James hasn't gone to Manchester City by the middle of the week, I'm sure he'll want to play, because he just loves playing football, as you saw out there [against West Ham]."

Milner is comfortable with that situation and has already brought his passport into the club in preparation to travel and play. If he features against Rapid Vienna, he would be cup-tied and could potentially be unavailable for 17 matches for City in the Europa League should they reach the final of the competition. That prospect, combined with Milner's threat to pull the plug on the transfer, is expected to lead to a fraught day of negotiations between all parties tomorrow.

Both club's preference is for Ireland to form part of any deal as a makeweight but, should that not be possible, City had previously indicated they were willing to do a straight cash deal, valuing Milner at about £26m. However, City have never been in a rush to complete the transfer, perhaps suspecting Villa would cave in.

Instead, Villa have dug their heels in and rebuilt bridges with Milner. Randy Lerner, the Villa chairman, and Paul Faulkner, the club's chief executive, have spoken to Milner in the past week, strengthening the lines of communication that had broken down after O'Neill provoked a furious row during pre-season when he claimed that the player had told him he wanted to leave the club.

Villa know that Milner's head has been turned and are resigned to losing him if City meet their valuation, but time is fast running out for the world's richest club to show the colour of their money if Ireland refuses to budge on his financial demands.