"If Palace go down, Paul would not be obliged to stay," Stein said. "Even if they stayed up he could leave. There would be an agreed option at a certain price, but it's no more than that at the moment."
The England midfielder had been touted as a pounds 3m target for Palace and their prospective owner, Mark Goldberg. However, Stein revealed last night that no transfer fee would change hands until the summer and the player would only be with Palace for the rest of the season.
"I've spoken to Mark Goldberg on the phone a couple of times, but we have not talked terms. There's no point as Paul might not fancy the club or the set-up," Stein added.
Stein's revelation raises new questions about why Rangers are letting their man go without any guaranteed payment - and whether Palace have the money to buy him.
Gascoigne is due in London next week to have a look at Palace, but he may need some convincing. Stein said: "Paul would like a bit more certainty. He asked me who is running the club and that's not particularly clear. I would anticipate there will be some other clubs coming in."
Stein met Middlesbrough's manager, Bryan Robson, yesterday and Everton could even become involved as news that Gascoigne is available on loan spreads throughout the game.
Meanwhile, Sasa Curcic's pounds 1m move to Selhurst Park, which appeared to have stalled a few days ago when an application for a work permit was rejected, may be revived.
The Aston Villa manager, John Gregory, has revealed that he expects Palace to make a new attempt to secure a permit for the midfielder.
"I think that Palace are making one more try," Gregory said. Curcic has only started three games for Villa this season as well as losing his place in the Yugoslav national team. Both factors contributed to Palace failing to secure a permit.Reuse content