Newcastle have withdrawn from negotiations to sign striker Bafetimbi Gomis after Lyon rejected their latest offer.
However, the bid remains on the table with a game of brinkmanship unfolding, with the start of the new season fast approaching.
The Magpies are understood to have offered in the region of £7million for a player who has a year remaining on his contract, but Lyon are attempting to extract significantly more.
But owner Mike Ashley has proved famously stubborn on contract negotiation over the years and the chances of him acceding to the French club's demands seem remote.
Reports from France claiming that Newcastle have pulled back were confirmed by sources on Tyneside this morning, and the news will come as a further frustration for manager Alan Pardew, who is still waiting for new director of football Joe Kinnear to make a first breakthrough since his appointment.
The Magpies are the only Barclays Premier League club yet to make a senior signing this summer with their opening league fixture at Manchester City just three weeks away this evening.
Kinnear had signalled his intention to bring players in within days of his arrival, but having effectively taken over former managing director Derek Llambias' role on the transfer front, he is yet to deliver.
Strikers have been Pardew's priority throughout the closed season with Gomis and Aston Villa's Darren Bent high on his wish-list.
He has also been linked with QPR's Loic Remy, who opted to join Rangers rather than Newcastle in January with the Magpies initially believing they had got their man.
The resolution of Papiss Cisse's situation - he had initially refused to wear the name of new sponsor Wonga on his kit - means he will now return to the fold with Shola Ameobi, who scored the only goal in yesterday's 1-0 win at Blackpool, having had to hold the fort to date during pre-season.
The current situation will do little to placate fans furious at Kinnear's appointment in the first place and the lack of transfer activity since after last season's difficulties, which saw the club flirt with relegation until the final few weeks of the campaign.
Meanwhile, midfielder Yohan Cabaye, who has been repeatedly linked with a move away from St James' Park this summer, has insisted he is focussing only on the club's opening fixture at the Etihad Stadium after supporters at Bloomfield Road yesterday urged him in song to stay.
He told the Chronicle: "It's always nice to hear that, and the fans were fantastic, as they are every time. It was a great moment.
"I'm just working hard. We have to be focused and ready for the first game on August 19."