Everton have confirmed that the £8.6m deal in place to sign Leroy Fer from FC Twente has collapsed.
The Netherlands international has appeared set for a switch to Goodison Park until problems arose during the midfielder's medical.
It's understood during assessments medical staff identified an issue which raised enough concerns for Everton to go back to FC Twente in an attempt to renegotiate the deal.
Instead of paying the full fee up front, it's believed Everton wanted to agree a deal based on appearances to insure against the move proving a waste of money in the event of injury.
FC Twente immediately rejected attempts to renegotiate, although talks had been ongoing. They now appear to have collapsed completely with Everton saying the deal is off.
Twente chairman Joop Munsterman said yesterday: "Everton have additional requirements on the method of payment. Here we do not agree. It's stuck.
"We don't play that game at Twente. They can come up with any demand they wish but we're not playing along with their demands."
Everton manager David Moyes is likely to be bitterly disappointed at the collapse of the deal having talked up Fer this week.
Moyes said: "He's a really good player. He's someone who we've liked for a long time. He's young and he's certainly an up-and-coming prospect."
Although the transfer window is open until tomorrow night, it's understood Everton wanted a quick resolution so they could turn their attention elsewhere if an agreement could not be met.