Birmingham have had a £3million bid for striker Marlon Harewood rejected by West Ham.
City made an offer of an initial £2million plus add-ons for Harewood, who is surplus to requirements at Upton Park.
But the Hammers are looking for something near £5million for the former Ipswich and Nottingham Forest player.
That is unrealistic from the point of view of Blues, who are also interested in West Ham defender Paul Konchesky.
Hammers manager Alan Curbishley will be looking to recoup the majority of the £6million he paid Birmingham for defender Matthew Upson in January.
Harewood played a major role in the Hammers regaining their Barclays Premier League status two years ago when he scored 16 goals.
But he has gradually slipped down the pecking order and last season netted only four goals.
Blues boss Steve Bruce has been given the green light to continue with his transfer plans despite the current uncertainty surrounding the future of the club.
He has already signed Middlesbrough defender Stuart Parnaby and agreed a permanent deal for Arsenal midfielder Fabrice Muamba, who spent last season on loan at St Andrews.
