The City boss confirmed on Thursday that negotiations are still ongoing and the Eastlands outfit are preparing to make an increased bid for the England international.
Lescott has had a written transfer request rejected by Everton and City have had bids of £15m and £18m rejected by the Goodison Park club, who insist the 26-year-old is not for sale.
But Hughes is set to further test Everton's resolve and said: "We have made offers and shown interest, obviously that is seen by virtue of the bids we have put in."
"But they have been rejected and Everton are fully within their rights to do that, we respect that. "We are still trying to speak to the people who will ultimately make the decision over whether or not the deal continues. "Those conversations are still to take place but how long they will still be active is open to debate.
"It comes down to the club themselves and if they feel they don't want to do a deal in terms of the players they have they have a right to do that, and we respect that, irrespective of the player himself or how he feels."
If a deal for Lescott fails to materialise Hughes, who has already spent £100m in the transfer window, is likely to move on to other targets before the transfer deadline at the end of the month.
Hughes added: "We were looking to strengthen the defensive options we have got. We have done that in respect of Kolo, we are very pleased he is here.
"I have stated we would like further strengthening to take place but if not we go with what we have got."