Modric had been interested in a move to Chelsea where he could fulfil ambitions of playing Champions League football, but chairman Daniel Levy explained the club’s position to the midfielder last night.
“He understands our position. He is not for sale at any price and that is the end of the matter,” The Mirror quotes him as saying.
“We are not in the business of selling our best players.”
The Blues recently made an unsuccessful £22m bid for the Croatian, an amount that manager Harry Redknapp dismissed as “farcical”.
Levy is understood to be boosting the 25-year-old’s £45,000-per-week salary at the club, where there is a ceiling of £75,000. Chelsea’s Roman Abramovich was thought to be offering three times his current earnings.