The two clubs agreed the fee when Adebayor moved to the Bernabeu in January but the deadline to complete the transfer has now passed.
But Real boss Jose Mourinho is keen to sign the former Arsenal man on a permanent deal if the price drops by as much as half.
Spain calling: Emmanuel Adebayor (right) wants to complete a permanent move to Real Madrid
Adebayor himself wants to extend his stay in Spain and will hope that City will agree to take a huge loss on a player they paid ?21m for two years ago.
There is strong interest from AC Milan while Tottenham have also been linked with the 27-year-old as Harry Redknapp looks to bolster his front line.
On the mark: Adebayor (centre) scord five goals during his five month stay at the Bernabeu
But Adebayor will likely hold out for a move to Madrid where he scored five goals in 14 appearances.
City are believed to be prepared to take a financial hit and allow Craig Bellamy to leave on the cheap but may be less willing to do so with their other want-away stars.
?AC Milan plot swoop for Premier League pair Drogba and AdebayorReal to open talks with City over permanent deal for AdebayorForget City, I want to join the best club in the world! Adebayor eyes permanent Real deal All the latest Manchester City news, features and opinion
?Explore more:People: Craig Bellamy, Emmanuel Adebayor, Harry Redknapp, Jose Mourinho Places: Madrid, Spain
Source: Daily Mail
Source: Daily Mail