Alen Halilovic
Alen Halilovic was wanted by Tottenham in the summer. [Reuters]

Arsenal and Tottenham have suffered a huge setback in their pursuit of Alen Halilovic after Dinamo Zagrev director Zdravko Mamic revealed they are in negotiations with Barcelona regarding a possible summer deal.

Spurs were close to signing Halilovic last summer alongside his then-teammate Tin Jedvaj, but the double deal collapsed at the very last minute. Jedvah eventually moved to Italian side Roma and Halilovic stayed at Dinamo one more season.

Last January reports claimed that Tottenham were set to renew their interest in Halilovic while Arsenal boss Arsene Wenger was monitoring his development, but it looks as though Barcelona will win the race for the midfielder unless the north London clubs take immediate action.

Mamic confirmed last Sunday that the Spanish giants have presented a formal offer for the attacking midfielder and although it was not accepted the negotiations are still ongoing.

"The offer wasn't accepted because neither Dinamo nor the Halilovic family were entirely satisfied with the conditions proposed by Barça" Mamic told Catalan newspaper Sport.

"But I am sure that we haven't heard the end of this, Barcelona are persisting to ensure that the transfer takes place,"

According to Croatian media, the first Barcelona bid was close to £3m but Nou Camp officials are set to improve their offer in the next few weeks.

The 17-year-old, who has been compared to former Spurs star Luka Modric, is considered one of the best talents in European football.

Despite his youth, Hailovic has already earned three cups for Croatia at senior level and is a pivotal player at Dinamo, where he has already made 42 appearances, including three in last season's Champions League.

Recently, Halilovic claimed he loved both the Premier League and La Liga and confirmed that he was close to joining a European club in the summer.

"I love English and Spanish football, and during last summer I was near to a particular club, and they are still tracking me," he explained.