Manchester United's hopes of signing Real Madrid's Fabio Coentrao have been dented after the player signed a new one-year contract extension with the Spanish giants by increasing his salary by €1m per season, according to reports.

The left-back was set to leave the Santiago Bernabeu at the end of the season but his excellent performances in the Copa del Rey and in the Champions League semi-final against Bayern Munich has persuaded both the player and Real to reconsider – Coentrao has taken advantage of Marcelo's injury to become first-choice left-back in the decisive stages of the campaign.

According to Spanish newspaper El Confidencial, the Portuguese international will sign a new contract extension until June 2018 after the Champions League final in Lisbon – and will earn €4m per season.

After being severely criticised, Coentrao is back in favour. In January, nobody felt he had a future at Real but he has now become indispensable - in just four months - in the big games.

United have been heavily linked with the Portuguese in recent years. Indeed, he almost joined the Premier League champions on transfer deadline day last summer. The deal stalled at the last minute when Los Blancos failed to secure the services of Guilherme Siqueira as a replacement.

After selling Fabio da Silva to Cardiff in January and with Patrice Evra set to leave Old Trafford at the end of the season, Manchester United were expected to renew their efforts to sign Coentrao next summer – but with Real's new lucrative deal it looks like United will have to look somewhere else to find a replacement.