Manchester City admit defeat in pursuit of Isco with midfielder set to join Real Madrid instead

The Spaniard has been among Manuel Pellegrini's top targets

Manchester City were resigned last night to their new manager Manuel Pellegrini failing in his first task as manager – persuading his protégé Isco to sign for the club.

The club are phlegmatic about the 21-year-old's apparent decision to opt for Real Madrid, despite the relationship he had developed with Pellegrini – his "footballing father"– who officially began work as Roberto Mancini's successor yesterday.

Since the pursuit of Isco was a by-product of the club turning to 59-year-old Pellegrini as manager, it is understood that director of football Txiki Begiristain will not go back into the market for an alternative purchase. Pellegrini has new signings Jesus Navas and Fernandinho at his disposal and it has been indicated that the latter was signed at the new manager's behest. If the club's post-season tour of the United States was anything to go by, Samir Nasri may also become a new player with Mancini out of the club.

Isco left little to the imagination when the Malaga midfielder said yesterday that "Madrid excite me. They are one of the best teams in the world," with a possible £25m deal imminent. City also appear to have all but given up on signing Napoli's Edinson Cavani, but because he was very much a Mancini target over a number of seasons, that is not seen as a disaster. Pellegrini is understood to be less convinced about signing the Uruguayan. Sergio Aguero put his signature to a new contract earlier this month and with some prospect that Carlos Tevez and Edin Dzeko will stay into the new era, City appear to feel relaxed about their strikeforce.

Pellegrini publicly discussed Navas and Fernandinho for the first time yesterday, telling the club's in-house media: "Jesus is a player I know well from La Liga. He is quick, has excellent technique and City fans will enjoy watching him. He will provide a variety of attacking options for us and can also score goals as well as create them."

He said he had made Fernandinho one of his top priorities. "He has impressed me on a number of occasions over the past few years and is another player I've taken a keen interest in. He is an experienced international who will further strengthen our midfield and I think he will be well suited to the Premier League. He is a superb athlete with a wide range of passing, can score goals and most importantly, can quickly turn defence into attack."

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