The Spanish giants believe a deal has already been agreed with Manchester United and the club are prepared to focus their attentions elsewhere.
Spanish paper AS claims Real president Florentino Perez is so convinced they will not even consider testing the water with an offer to La Liga rivals Valencia.
The Argentina defender has been strongly linked with a switch to Old Trafford, although it is understood Louis van Gaal does not see him as a primary transfer target.
Real's Sergio Ramos remains the Dutchman's first choice but the 10-time European Champions are keen to keep the 29-year-old at the Bernabeu.
GETTY
Real Madrid claim Nicoals Otamendi will make a move to Manchester United
Otamendi, 27, had been mooted as potential replacement for the Madrid star but the latest reports suggest attentions will now be turned to their former player Ezequiel Garay.
However, a deal to take Ramos to Manchester is by no means finalised after an initial approach from United was rejected.
A second bid is being considered in but the Manchester Evening News claim reports coming out of Spain regarding Otamendi's future means Van Gaal could be resigned to missing out on the World Cup winner.
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