Modric is one of Jose Mourinho's primary transfer targets this summer and the Spanish giant's have already seen several bids turned down by the White Hart Lane club.
Waiting game: Mourinho's patience is waning thin in his battle to sign Modric
The latest to be refused is a
£30million offer plus an additional £8m in add-ons spread across the
length of the Croatian's contract.
Levy is also said to be unhappy with the structure of Madrid's latest offer, wanting more money up front and less in add-ons.
The rebuffed offer is yet another blow for the Spanish club in their summer-long chase to sign Modric - who has agreed personal terms on a five year deal with Madrid.
And it is understood Real chiefs have told their Tottenham counterparts they will now look at alternative midfield targets - with a move to re-sign Wesley Sneijder from Inter Milan a possibility.
Real deal? Modric is yet to secure a move away from White Hart Lane
Tottenham are adamant Modric - who still has four years to run on his current deal - will stay in north London if Madrid do not meet the asking price.
The 26-year-old remains desperate to quit White Hart Lane for Real ahead of the new season.
Modric has embarked on a mini-revolt by boycotting pre-season training sessions and the club's tour of the US.
Andre Villas-Boas' side will return to London today with the Portuguese manager seeking a quick resolution to the Modric affair in one way or another.
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