Essendon has decided against releasing Paddy Ryder as a free agent by Sunday's deadline.

The Bombers were looking at letting the ruckman out of the final two years of his contract, in return for a first round compensation pick, No. 21.

Paddy Ryder. Credit:Joe Armao

The club would have then attempted to negotiate a separate deal for Port Adelaide's pick 17, to enhance its compensation for Ryder.

The AFL would not have signed off on the deal for pick 17 unless it was done independently to the release of Ryder as a free agent, and been commercially viable in its own right.

The Bombers and Power will now have to start working towards a new deal, with a number of potential scenarios, some involving other clubs, already having fallen over in the past week.