For months, Manchester United's interest in Bulgarian striker Dimitar Berbatov was a public secret, but having haggled for so long with Tottenham over the value of the transfer fee, they now face competition from two clubs on transfer deadline day.

Reports in Spain, quoted by English media, have claimed that Spanish champions Real Madrid are preparing a transfer bid for the Bulgarian, believed to be in the region of £36 million (44.4 million euro).

Berbatov himself is understood to be in talks with United manager Alex Ferguson at the club's Carrington training facility, Sky Sports News reported, even though United and Tottenham are yet to hammer out a fee. Tottenham are still holding out for £30 million (37 million euro), with United making a take-it-or-leave-it offer of £25 million (30.8 million euro).

One club that has matched Spurs' valuation are United's cross-town rivals Manchester City, offering a British transfer record of £34 million (42 million euro), which has been accepted by Tottenham.

City manager Mark Hughes was scheduled to meet Berbatov, but having said that he wanted to play in the Champions League and described a move to Old Trafford as "a dream", it is unlikely that the striker settle for a move to another team playing in the Uefa Cup.

Real could easily offer Berbatov the Champions League football he craves and with president Ramon Calderon under pressure from the fans, having failed to deliver on his promises to sign Christiano Ronaldo from United or Kaka from AC Milan, a swoop for Berbatov would help appease the growing discontent.