"Alonso is our priority, if he fits with our budget, and this does not seem to be the case. We are very far away from Liverpool's figures," said Valdano.
"Liverpool have adopted a position that is making it very difficult for us and right now we can see ourselves distancing ourselves from the player.
"There are people who are a little bit mistaken when they speak with Real Madrid. When we ask after a player they think it's a great economic opportunity and they go beyond what is reasonable. We are looking at alternatives to Xabi - players who have a lot in common with him."