Italy's second largest city has spent the past few days embroiled in the prospect of not one, but two derbies. As well as Sunday night's duel on the pitch, in which a renascent Internazionale seek to challenge the Serie A leaders, Milan, is the tussle off it, as these sworn rivals have been competing for the signature of Carlos Tevez. As befits the Argentinian's unique history of complex and controversial transfers, this effort has been spectacularly knotty but, on Thursday, it looked as if Milan were about to emerge with the prize.

In the morning Inter's president, Massimo Moratti, more or less conceded defeat. By lunchtime Milan's chief executive Adriano Galliani had arrived at Luton airport by private jet in the company of lawyers and agents, intent on securing the required handshakes from the Manchester City delegation they met in an office in central London. This was quite a coup, not least because Inter had offered more money, but they had the trump card as Tevez wanted to play for the Rossoneri. Meanwhile back in Italy, funds were being raised by the €35m (£29.2m) sale of Alexandre Pato to the nouveau riche Paris Saint-Germain. That wasn't an entirely popular move with supporters. In a Gazzetta dello Sport poll asking if the sale of Pato to fund the purchase of Tevez was a good thing, 70% replied "no".

Then, by mid-afternoon, came the bombshell. Pato was staying put. "I want to contribute to the writing of Milan's history and to the future success of this club, in perfect harmony with everything," the Brazilian announced on Milan's official website, making sure in his statement to offer his gratitude to the owner, Silvio Berlusconi (more on that later). The mention of "harmony" was interesting, considering Pato and Milan coach Massimiliano Allegri don't get along.

In Paris, Milan, London, Manchester, Abu Dhabi and Qatar, phones were frantically buzzing to deal with the ramifications of this unexpected news. With the Pato deal cancelled, Milan's (and City's) plans for Tevez duly unravelled. One can only imagine the expressions within the Inter camp as the news filtered through. Game on again.

It is funny how one man's decision can reach out to effect the plans of so many. And just to add a little extra intrigue to Pato's resolution to stick at San Siro, we have to remember that his girlfriend is none other than Barbara Berlusconi, daughter of Silvio, and assistant to Galliani on the board in terms of running the business. Football meets soap opera at San Siro.

It was not so much a love triangle as a love heptagon. Leonardo, the ex-Milan director of football at PSG, pines for his old protégé Pato, who is romantically involved with Berlusconi's daughter, Barbara, who happens to work with Galliani, who was in England trying to nail the deal for the striker he covets in Tevez, who had a tiff with Manchester City manager Roberto Mancini, whose ex-boss at Inter was also keen to catch the attention of Tevez? Are you keeping up at the back? Never mind. The story changes every day anyway. Over the past couple of weeks the Italian papers have served up ever changing headlines. One day it's Tevez to Milan. Then Tevez to Inter. Next Tevez to PSG.

Meanwhile, outside the city in the more serene environment of the lush training ground, away from all the boardroom shenanigans, Milan's two legendary clubs have a derby to prepare for. Against reasonable expectation, it is bound to be a competitive one, too. Inter, who a few weeks ago were more concerned about being close to the relegation positions, are within striking distance of having a say in the scudetto race. Having lost half of all their league fixtures going into early December, they have recovered with a sequence of five successive wins, the most recent a 5-0 thrashing of Parma. They go into Sunday's game eight points behind Milan but, should they reduce the gap to five, they will almost feel able to look at the league table again without gnashing their teeth. Victory would help Inter to forget in one day the numerous calamities of the season.

Mind you, Milan are not exactly in bad form, having gone three months without defeat in Serie A. Zlatan Ibrahimovic has excelled, and it is between Robinho and Pato to accompany him up front, with Kevin-Prince Boateng the trequartista. The former Portsmouth man outlined how determined Milan are to crush Inter's hopes of a meaningful revival by opening up an 11 point gap. "We are the strongest team and we want to take Inter out of the Scudetto equation," he said.

Claudio Ranieri's team are boosted by the return of Wesley Sneijder, who is back after more than two months sidelined, which means the squad for once is at full strength. The debate is whether Ranieri will stick to the 4-4-2 which has been efficient recently, or reintroduce Sneijder into a 4-4-1-1, which will mean dropping one of the two strikers, Diego Milito or Giampaolo Pazzini, to make way for the Dutch playmaker. Diego Forlán is likely to be on the bench.

"This has been a rather strange season for us," Ranieri mused. "We have had ups and downs, but at the moment we are doing quite well." He attempted to cool any expectations in a pre-match press conference but did try to load some more pressure on their rivals by pointing out that Milan are the team with more to lose.

Behind the scenes of Inter's recovery, one interesting aspect is the rumoured gee-ups from a certain ex-coach. Some players, who are still under the spell of their treble winning coach José Mourinho, apparently asked Moratti for some support from their old mentor. Moratti put in a call to Madrid, and Mourinho sent some messages to offer a psychological lift. Considering the Real Madrid coach has harboured longstanding differences with Ranieri, that added to the fascination of the soap opera. And once the derby is out of the way, something suggests that the Pato story, and the Tevez story, are not finished yet.