Real Madrid could yet face competition from Manchester City for the signature of Portsmouth midfielder Lassana Diarra. The Spanish giants offered a reported £20m for the former Chelsea and Arsenal man but the financial muscle of the Abu Dhabi United Group may scupper the deal if City manager Mark Hughes adds the player to his Christmas wish list.

"He is a player I like. He is a good player but he is still a Portsmouth player," Hughes said.

"Things may develop for him. But the window isn't open at this moment so we'll just wait and see what happens. You can make of that what you want," he added in The Sun.

Regardless of who stumps up the cash, Portsmouth manager Tony Adams is sure he will be allowed to re-invest the full proceeds of any sale.

Portsmouth yesterday confirmed Real had made an "exceptional" offer - reported to be £20million - for Diarra, who signed from Arsenal in January for just £5.5million.

The final decision was left to Adams but he had no intention of standing in Diarra's way, despite the fact Portsmouth will miss his commanding midfield presence.

Adams' focus is now on bolstering a squad that was stretched to the limit by their Uefa Cup run.

Asked whether he was confident Portsmouth owner Alexandre Gaydamak would make every penny available, Adams replied: "Absolutely. I am 100 per cent confident.

"My job now is to get the recruitment right and add to the squad. We are going to have to find some other players and move on. The Uefa Cup has been very draining for us.

"We do need reinforcements but it doesn't mean I will spend it all at once.

"If people know you have got money they overcharge you. Maybe you have to use your head a little bit and get the right player at the right price.

"I have had players in mind since I have been in the job. You have to get it right. Harry was fantastic at it and hopefully I have learned a bit off the master.

"I will try to do some business but if it is not right, I won't do it."

Redknapp signed Diarra from Arsenal and also helped Portsmouth make a substantial profit on Sulley Muntari, who was sold to Inter Milan for around £13million during the summer.

Adams believes Real's approach for Diarra shows Portsmouth in the best possible light and is the perfect recruitment advert for a club that already boasts England internationals David James, Sol Campbell, Glen Johnson, Jermain Defoe and Peter Crouch.

"I think it is a massive compliment to a club like Portsmouth that they have got a club like Real Madrid coming for their players," said Adams. "Lassa wasn't getting a game at Arsenal or Chelsea, he came down here and played well for Portsmouth and won the FA Cup and now Real Madrid come knocking.

"It is an advert for all the players who are not getting in the team at Manchester United and Arsenal they can come and play here.

"This is a good club and we have done well for the last couple of years but we have to be realistic. Lassa is a super player and we are going to miss him but for that amount of money I am not going to stand in the way."

Adams is uncertain whether Diarra will feature again for Portsmouth, although it looks unlikely given he is currently sidelined by an ankle injury that has kept him out since the middle of last month.