Roberto Mancini has consistently rubbished speculation linking Balotelli with a return to Italy, and as recently as Monday morning Mancini's assistant David Platt played down the prospect of a deal before Thursday's transfer deadline.
But the latest reports from Italy suggest Milan have made a breakthrough in their attempts to sign the striker.
There has been no official comment from City, and even Platt was in the dark when he stood in for Mancini at a press conference ahead of Tuesday's trip to QPR.
He said: "We've three days left before the deadline, but I haven't heard anything, to be honest. It's speculation.
"It's a shame Robbie's not here, because he might know a lot more than me. As far as we're concerned, he's still a Manchester City player. I'm not aware of any negotiation."
Balotelli, who previously played for Milan's rivals Inter, was labelled a "bad apple" by the club's owner Silvio Berlusconi earlier this season after a series of disciplinary problems during his two-and-a-half-years in England.
But neither that outburst, nor Berlusconi's claim last week that the 22-year-old is out of Milan's price range, has killed off talk of an imminent deal.
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