Marca claims that Barcelona could hijack the plans of Zinedine Zidane by offering Ceballos an instant role in the first-team squad – while Los Blancos' intentions would be to sign him now but loan him back to Betis for the 2017-18 season.
The 20-year-old midfielder is considered one of the next big things to emerge from the prolific Spanish academy.
Real Madrid were already linked with his services in 2015 but the player then decided instead to commit his long-term future to Betis by signing a new deal, setting his release clause at €15m (£13.2m, $17.1m).
Earlier this week AS reported that Los Blancos had advanced the negotiations to complete the move after the midfielder had proven to be one of the main attractions of the Under 21 European Championship, having helped Spain book a place in the final against Germany on Friday night (30 June).
The report suggested that the deal will be completed after the tournament with Real Madrid being ready to pay a little bit more than his €15m clause – and keeping him on loan at Betis for the 2017-2018 season.
Ceballos admitted on Thursday that he was "flattered" by those links but added that his only focus was to help his national team win the Under 21 European Championship.
"After all when big clubs express interest in you it is because you're doing things right. It's nice [to be linked with Real Madrid]. As a child everyone likes to see that but I'm calm and trying to go unnoticed. I talk to my family and friends to isolate myself a little bit from [those rumours] and get strength ahead of the final," Ceballos said.
But Marca now reports that his proposed move to Real Madrid might be scuppered by Barcelona's last minute intentions to join the race.
The Catalans have already lost two transfer battles to Real Madrid for Theo Hernandez and Vinicius and could make a last ditch attempt in order to win the one for Ceballos.
Betis are trying to tie him to a new deal but the midfielder will have the last word as his club won't be able to avoid his departure if either Madrid or Barcelona meet his €15m clause.
The Catalans, like Real Madrid, shouldn't have any problem to pay that fee and Marca claims that they would offer Ceballos an instant role in Ernesto Valverde's first-team squad to convince him to snub Los Blancos and move to the Nou Camp.
Nevertheless, Barcelona are desperately looking to bolster their midfield with both Marco Verratti and Paulinho having been heavily linked with big money moves to Valverde's side.