Everton have scrapped their bid to sign FC Twente midfielder Leroy Fer after the two clubs failed to renegotiate terms following the player's medical.
Fer had been set to complete an £8.6 million move to the Premier League, but the medical indicated possible future problems with his knee after he suffered a serious injury while playing for Netherlands against Turkey in a World Cup qualifier on September 7.
Everton were still interested in bringing the player in from the Eredivisie, but wanted a large portion of the transfer fee to be based upon appearances.
However, Twente refused to move on their original valuation and David Moyes has now walked away from the deal.
Everton chief executive Robert Elstone told Sky Sports News: "[It's] very sad. We were very excited about the prospect of Leroy Fer coming to Goodison, but the transfer didn't go smoothly in the end - there were issues.
"We have to put the club first. Our track record shows we do that pretty well. We thought long and hard about it, and it didn't work out."
Twente chairman Joop Munsterman said on Tuesday: "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."