AC Milan general manager Adriano Galliani has confirmed his club's interest in signing Gerard Deulofeu from Everton but said they are not willing to accept an obligation to make the deal permanent.
Milan are keen on signing Deulofeu, 22, on loan until the end of the season, and they would also be willing to agree on an option for a permanent transfer of the former Barcelona player in the summer.
However, Galliani says Everton want that permanent deal to be mandatory.
"This deal is not getting any easier, nor is it getting any more complicated -- the positions are simple: we are proposing a straight loan deal or a loan with an option, they are demanding a loan with an obligation," Galliani told reporters outside Casa Milan, the club's headquarters, according to La Gazzetta dello Sport.
"Given our contractual obligations, we are unable to do this kind of a deal. I'm open to anything, but the only thing I am not prepared to do is sign a loan deal with an obligation."
Deulofeu, whose contract at Goodison Park expires in 2018, last played for Everton in the 3-2 defeat to Watford in mid-December.
He has started just four Premier League games this season and does not appear to be a prominent part of Ronald Koeman's plans.