Manchester United have suffered a massive setback in their pursuit of signing Sporting Lisbon star William Carvalho.

The 22-year-old midfielder has been a long-term transfer target for the Red Devils. Earlier reports had suggested that United had met the Portuguese international's £37m release clause and the player would complete his switch to Old Trafford in the summer.

However, Sporting president Bruno de Carvalho has put recent rumours surrounding the midfielder's future to bed. He claims the Portuguese star is happy at the club and will continue with his current employers beyond the coming transfer window.

"I am almost certain that William Carvalho will continue at Sporting. You never know, any [club] that is interested in signing him could meet the termination clause, but William is very happy and so are we," De Carvalho told A Bola.

"Let's have a year of Champions League, a year that will be important for everyone," Sporting president stressed.

This could be a major blow for United as the Old Trafford outfit have sent scouts to watch Carvalho on numerous occasions in the current campaign. David Moyes, the former Red Devils' manager was reportedly keen on securing the services of the tough-tackling midfielder.

United could however, try to make an approach in bringing Carvalho to Old Trafford in the summer window. However, the Red Devils could face tough competition in landing the midfielder at the end of the season.

The Mirror claims Real Madrid are set to rival United for Carvalho's signature. The Spanish capital club are ready to meet the player's £37m release clause and are set to beat the English side in the race to sign the Sporting midfielder.

Meanwhile, the Sporting star had earlier admitted that he was flattered by reports linking him with a move to United and Real.

"It's nice being praised and to know there are some big clubs interested in me. It could be Manchester United or Real Madrid," the Portuguese midfielder told Sky Sports earlier in March.

"It's just nice to have a great European club after me, but at the moment I'm just totally focused on Sporting and doing my best until the end of the season. At the end of the campaign, we will see what happens," Carvalho said.