KAKA’S PROPOSED world record transfer from AC Milan to Manchester City collapsed dramatically last night at the end of a day when it seemed the former World Footballer of the Year was moving tantalisingly close to joining the Eastlands outfit.

City confirmed in a statement that they had pulled out of negotiations as there was little chance of a deal being done.

Executive chairman Garry Cook told www.mcfc.co.uk: “Whilst Manchester City has an obvious interest in world-class players of the quality of Kaka, we owe it to our fans that such a transfer must work on every level; commercially, financially, in terms of results on the field and within Manchester City’s broader community.”

Cook, along with other members of the City delegation, had meetings with Milan officials and Kaka’s father, Bosco Leite, yesterday. But it soon became apparent that the complexity of the transfer was not going to work in City’s favour and the player, who never spoke face to face with the club, was not keen on leaving Milan anyway.

Kaka had pointed to his heart when appearing at the window of his house to wave at protesters who had gathered outside to make their feelings known last night.

Just minutes before City’s statement, Milan owner Silvio Berlusconi delivered the news all Rossoneri supporters wanted to hear.

“Kaka is staying at Milan,” he told Italia 7 TV. “He has turned down the money and he won’t ask for an increase. He prefers to stay at Milan.

“Money is not everything to Kaka. He is staying with us, there are things which are more important than money: we are happy. We offered the player the chance to consider the offer and make himself a fortune, but he has higher values.

“It was down to me and also to him. When I heard he would prefer to stay, that he didn’t think he would be missing a great opportunity and he prefers the values of our flag, the values of closeness and friendship, the warmth and the affection that all the fans have shown him in these days, I said ‘hooray’ and we hugged. Kaka is staying at Milan.”

City officials, however, have pointed out that Milan accepted their offer — which has now been estimated at €100 million – but feel Berlusconi found the whole situation became too controversial and therefore pulled out.

Earlier yesterday, Bosco Leite, Kaka’s father representative, had met AC Milan and Manchester City representatives as the Brazilian’s spokesman admitted his decision over a move would hinge “on the team they intend to put together” at Eastlands.

On a day of frenetic transfer activity involving City, Craig Bellamy completed a €15.5 million switch from West Ham United and Hamburg accepted an offer, believed to be €20 million, for their Dutch international Nigel de Jong.

The Wales international agreed personal terms on a four-and-a-half-year deal. “He is an outstanding player who provides us with qualities that we are slightly lacking,” said City manager Mark Hughes.

City will pay the bulk of the transfer fee up front to West Ham, who rejected a similar offer from Tottenham for Bellamy in anger at their manager, Harry Redknapp, going public on the bid.

De Jong, a 24-year-old midfielder, has been granted permission to discuss terms with City and his move is expected to be completed within the next 48 hours.

City will also renew their attempts to sign Roque Santa Cruz this week despite his manager at Blackburn Rovers, Sam Allardyce, insisting the striker is not for sale.

“The bottom line is, we don’t want to sell Roque Santa Cruz,” Allardyce said.

Kaka’s proposed move had drawn some interesting comment from Queens Park Rangers co-owner and Formula One boss Flavio Briatore, who said the money was “mad” and showed soccer needed a salary cap.

The Italian, whose associates at the English Championship club include billionaires Bernie Ecclestone and Lakshmi Mittal, dismissed the transfer bid at the launch of his Renault Formula One team’s new car.

“If you had put Schumacher in a Minardi, it would have gone nowhere,” he said. “If you put Kaka in this club, it is going nowhere anyway. I think it is completely mad. “You saw when Robinho arrived (at City) it looked like they had solved every problem. And now it looks like the team is very close to going down.”