Sky Sports understands that Dinamo Zagreb striker Duje Cop is attracting interest from clubs across Europe.
Blackpool boss Jose Riga has admitted his squad is lacking experience as he continues to search for reinforcements.
The Rossoneri have admired Manchester City striker Balotelli for a long time, with vice-president Adriano Galliani issuing regular statements suggesting the Barclays Premier League club should lower their asking price from a reported 33million euros (£28million).
Milan have held talks with Real Madrid over a possible return for Kaka, who left the San Siro for Spain for 68.5million euros in 2009, but discussions broke down this week when financial terms could not be agreed on a long-term loan deal.
But Berlusconi appeared to rule Milan out of any further negotiation over the pair during an interview with Radio 2 this morning.
Quoted in the Corriere dello Sport, he said: "Kaka and Balotelli? Neither of the two."
"It's not possible in this day and age to play Monopoly. Galliani remains optimistic but the tough language of accounting keeps him from doing his work."
Milan have money to spend following the sale of Alexandre Pato to Corinthians for 15million euros (£12.7million) but Real Madrid are holding out for a expensive permanent deal for Kaka, while Manchester City are unwilling to part with Balotelli even if his asking price is met.
City manager Roberto Mancini recently denied speculation he was ready to let the Italy international leave, saying: "No, it is not true. I am very, very happy (with Mario)."