Barcelona have reportedly offered Isco a signing bonus of €20m (£17.3m, $21.6m) to turn down a new deal at Real Madrid and move to the Nou Camp in the summer of 2018 as a free agent. Catalan radio station Rac 1 says that the Spain international is yet to respond to the proposal, but Los Blancos officials are growing concerned about the situation as the midfielder has turned down all attempts to tie him to a new deal.
Isco, 24, is under contract at the Santiago Bernabeu until the end of next season but his future at the club has been under scrutiny since last summer.
The Spaniard was heavily linked with a move to Tottenham Hotspur but he finally decided to stay with hopes of convincing manager Zinedine Zidane he deserves a regular place in his plans.
But the midfielder has failed to establish himself in Zidane's starting line-up during this season and last month admitted that he would consider a summer move away from the club in order to secure more playing time.
"I am calm with my future but I am worried about having minutes," he said to beIN Sports after a victory over Espanyol. "A player's career is short, so by the end of the season I will make a decision because it is my future that is at stake."
Marca later added the Real Madrid star has already made the decision to leave the Champions League winners, with Manchester City in pole position to secure his services ahead of Chelsea, Juventus and Barcelona.
Real Madrid, meanwhile, were trying to extend his current contract as the coming summer transfer window will be their last chance to recoup any money for his services.
However, Mundo Deportivo suggested that Isco was refusing to sign an extension in order to push through a move to Barcelona once his contract expires in 2018.
Real Madrid will not sanction Isco's departure to their arch-enemies at any price at the end of the current season but would be unable to prevent his move to the Nou Camp in the summer of 2018 if he is out of contract.
Rac 1 is now reporting that Barcelona have made the next step to complete the shock move by offering Isco a lucrative €20m bonus on top of his salary to convince the Spaniard to stay one more season at Real Madrid and join them for free ahead of the 2018-19 campaign.
Rac 1 adds that Isco is yet to make a decision about the Catalans' offer but he has also turned down the overtures from Real Madrid to meet with him in order to sign a new deal.
Isco, according to different reports in Spain, grew up supporting Barcelona and it is well-known that his pet dog is named after Lionel Messi.