Newcastle 'pull out of Phillips deal' as he 'denied move to St James' Park'

Newcastle have pulled out of a potential January move for Kalvin Phillips because of the demands being placed on the deal by Manchester City, according to reports.

Phillips is determined to seal a January exit for another Premier League suitor ahead of this summer's European Championship with his place in the England team under scrutiny.

The former Leeds midfielder has been starved off opportunities since joining the reigning English and European champions in a £45m move two-years ago and was recently signalled for a temporary switch to Newcastle.

Eddie Howe is desperate to bring in reinforcements during the January transfer window given his side's problems with injuries this season, however Newcastle are limited in how much they can spend because of Financial Fair Play regulations.

A loan move for Phillips would have helped them bring in a proven midfielder without worrying about FFP red tape, however, City's demands have made Newcastle reconsider, as reported by The Telegraph.

The Magpies are refusing to accept the £7m loan fee that City want them to pay to bring Phillips to St James' Park for the remainder of the season and are willing to walk away from the deal.

Loan fees are usually applied by parent teams who believe the departing player has sellable worth as was the case with Borussia Dortmund paying Man United £3.4m.

However, Newcastle believe the quoted loan fee for the Man City periphery player is too expensive and as such a deal between the two teams is now off.

City were also exploring the possibility of including an obligation to buy Phillips in the summer in the loan deal as they look to cash-in on the midfielder who has failed to fulfil his previous potential.

Newcastle are not keen on including such a term in