City's interest in Fernando could fade after reportedly sealing a deal for Argentine youngster Zuculini.

Manchester United and Liverpool have been handed renewed hope in their efforts to sign Porto midfielder Fernando after Manchester City shifted their attention to Argentine youngster Bruno Zuculini.

City failed with a double bid for both Fernando and Eliaquim Mangala on transfer deadline day but are reportedly still keen to bring the 26-year-old to the Premier League despite recently signing a new contract that ties him to the Portuguese champions until 2017.

But Manuel Pellegrini's side have also considered alternative options. According to Victor Blanco, the president of Argentine outfit Racing Club where Zuculini currently plays, City have fended off interest from a host of European clubs to seal a deal for the midfielder that will see him move to the Etihad Stadium this summer.

"Every season, Racing puts together a side to battle for the title and then nothing happens, Blano told Argentine news outlet El Dia. "So we wanted to keep the side and reinforce it.

"But we have several highly-coveted gems, such as Luciano Vietto, Rodrigo De Paul and Bruno Zuculini, who has already signed an agreement to leave in June to join Manchester City."

With the signature of another midfielder seemingly confirmed, City may focus their efforts focus elsewhere. However, Manchester United and Liverpool will be encouraged by City's actions and were also handed a further boost in their pursuit of Fernando after comments made by the midfielder's agent.

After signing a new contract, it was thought Fernando's suitors would have to meet his release clause thought to be in the region of €30m. However his agent Antonio Araujo has claimed that is not the case.

"In recent weeks I have had contact with Napoli, Inter and Juventus, but later these teams obviously made other choices," was quoted as saying by Tutto Napoli, via Inside Futbol.

"It could be however that there are new options in the summer and it cannot be ruled that he leaves for a figure lower than the clause.

"It depends on the desire of the club and the willingness to deal. "