The Spanish Football Federation insist they will have the final say on where the planned friendly against England will be played - and have defended the "fantastic" Bernabeu supporters.
England staff are mindful of the racism problems several players experienced at Real Madrid's home stadium on the last occasion they visited Madrid four years ago, when Shaun Wright-Phillips, Ashley Cole, Rio Ferdinand, Jermain Defoe and Jermaine Jenas were abused.
The Spanish federation (RFEF) were eventually fined £45,000 by Fifa, and the Football Association have insisted they are unwilling to play in Madrid on this occasion.
Even though the Spanish officials have stressed they decide where the fixture should take place, there is no prospect of the FA agreeing to England taking on a match in the Spanish capital.
The FA have confirmed coach Fabio Capello has personally requested a match against the European champions which is likely to take place in February.
The Spaniards have noted the FA's position over the location for the proposed match, and RFEF spokesman Jorge Carretero told PA Sport: "We are aware of their worry.
"The FA were clear that they wouldn't play the game in Madrid because of the racist attacks that they were subject to in 2004.
"But the fans that go to the Bernabeu are fantastic as they are in the whole of Spain.
"We're not thinking about an alternative location because at the moment there is no contract that is signed.
"If we reach an agreement then the game will be played where the Spanish federation thinks is best."
Carretero stressed: "In all likelihood there will be a game, we want to play each other.
"But we haven't signed anything. There is no contract whatsoever that we will play each other.
"It's only when we sign a contract that we will decide where the game will take place."
The fixture is expected to be played on Wednesday, February 11, the only remaining Fifa international date still to be filled.
Given it was only last month that Emile Heskey was singled out for racist abuse in Croatia, the FA are keen to take a stand on such matters and have made it a condition of the game that it will not be held at the Bernabeu, which is Spain's traditional, although not permanent, home.
Capello was coach of Real Madrid until last year but agrees with his current employers that the match should be played at a different location.
FA director of communications Adrian Bevington said: "This fixture is one of the friendly games that Fabio Capello requested to play. But as yet, a venue is still to be confirmed and the contract still to be signed.
"However, from the outset, the FA, with Fabio, were clear we would not play the fixture in Madrid due to the incidents of racial abuse we faced last time.
"Fabio is totally supportive of this fixture."
With Madrid ruled out by FA officials, Seville and Valencia would appear the most likely alternative cities for the game.
The FA have also been keen to stress no venue is in place, aware that a significant number of fans will want to make their travel arrangements.
Rather than see the problem simply move from one city to another, the FA have vowed to work closely with the RFEF on a number of anti-racism measures before the proposed fixture, which both bodies are expected to support.
Providing crowd problems - which reared their head in a much milder form at Wembley on Saturday - can be successfully combated, the fixture would be an exciting one for England.
Capello regards Spain as the best international side in Europe at the moment, and worthy winners of Euro 2008.
They are captained by Real Madrid goalkeeper Iker Casillas and beat Estonia 3-0 on Saturday in their latest World Cup qualifier.