Archie Gray’s £40m move from Leeds to Brentford has collapsed at the 11th hour after the two clubs failed to agree a mutually-satisfactory payment structure, leaving Tottenham as new favourites for the 18-year-old’s signature.

Gray arrived in west London on Saturday and was poised to undergo a medical at Brentford on Sunday after agreeing personal terms but has now returned to Yorkshire. While that represents good news for Leeds supporters, it seems almost certainly to be a temporary state of affairs as Spurs are understood to have now made their interest in Gray clear to Elland Road officials.

Related: Liverpool keen on Gordon but Newcastle ease worries with Minteh deal

Although Daniel Farke, the Leeds manager, does not want to lose his precociously-gifted midfielder or right back, he recognises the club needs to raise funds in order to comply with financial fair play regulations. This dictated that Brentford’s offer of an initial £35m transfer, potentially rising to £40m, was taken so seriously by the Leeds board.

Gray, the great nephew of the still-adored former Leeds player and manager Eddie Gray, does not turn 19 until next March and made 52 appearances in all competitions last season as Farke’s side narrowly missed out on promotion to the top tier, losing last month’s Championship playoff final to Southampton. Gray been extensively scouted by a number of clubs across Europe, including with Chelsea believed to also be interested in him.

After joining Leeds’s academy at the age of eight, Gray has represented England junior teams at every age group level up to and including Under-21s, while also winning the 2023-24 Young Championship player of the season award.

Meanwhile, Newcastle have moved to avoid the possibility of a points deduction by agreeing to sell their 21-year-old homegrown midfielder Elliot Anderson to Nottingham Forest in a deal potentially rising to £35m. After selling their 19-year-old Gambia winger Yankuba Minteh to Brighton for £33m on Saturday, Newcastle, who could also sell the former England striker Callum Wilson to a Saudi Arabian pro-Leagbue club, have ensured they remain on the right sided of the Premier League’s Profitability and Sustainability rules (PSR).

Newcastle negotiated to take Forest’s reserve goalkeeper Odysseas Vlachodimos to St James’ Park as a makeweight in the deal for Anderson. The 30-year-old Greek international’s impending arrival suggests Martin Dubravka, Eddie Howe’s second-choice keeper, will depart Tyneside later this summer. Vlachodimos is Greece’s current first-choice and has been capped 42 by his country. He made nine appearances for Forest last season, conceding 19 goals.

Anderson, a former Newcastle youth captain, did not want to leave his boyhood club but it is believed he has been offered a near 50% increase in wages at the City Ground. Despite Howe’s reluctance to part with a gifted and versatile midfielder, Anderson’s impending departure almost certainly ensures that the Saudi Arabian-owned club can retain their much-covered leading players this summer, namely Alexander Isak, Bruno Guimarães and Anthony Gordon.

Gordon is wanted by Liverpool but the possibility of the England winger returning to his native Merseyside now appears unlikely.