Manchester City made the decision not to sell Tevez after talks with club owner Sheikh Mansour.
If the Argentine refuses to play or retires, the club will seek compensation for breach of contract.
The deal, which has three-and-a-half years to run, is estimated to amount to tens of millions of pounds and if it is not honoured, City will take the matter up with his agent and former 'owner' Kia Joorabchian.
More follows.
Source: BBC Sport
Source: BBC Sport