The England international, who is a target for Real Madrid and Paris Saint-Germain, is now on the radar of City boss Pep Guardiola but he won’t come cheap.
Tottenham will fight to resist any bids for Alli, who has just been named the Premier League Player of the Month for January after scoring five times.
Pep Guardiola is set for a major clearout at Manchester City
But Manchester City could be tempted into doing business for Alli, 20, if the bidding passes the £89million that Manchester United paid for Paul Pogba last summer.
Guardiola is set for a major clearout of his ageing squad at the end of the season and wants to bring in more homegrown players.
Alli has been in inspired form for Tottenham this season
City’s paymasters have agreed to sanction a deal for Alli, who it is felt could play a key part in bringing major honours to the Etihad Stadium for years to come.
They will face stiff competition from Real, who have marked Alli down as one of the most exciting talents in world football and one they are willing to pay huge money for.