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City had been locked in talks with West Ham over a move for 25-year-old Paqueta, who had made it known behind closed doors that he wanted to join the Premier League champions.
But a potential move to the Etihad Stadium has been shelved after the FA and FIFA opened an investigation into potential betting breaches from Paqueta, much to the dismay of the player and his camp who are mystified and shocked by the investigation.
Paqueta played for West Ham at the weekend, scoring an injury-time penalty to condemn Chelsea to a 3-1 defeat at London Stadium, and has not been suspended while enquiries are carried out.
City, meanwhile, scraped past Newcastle United 1-0 at the Etihad Stadium thanks to Julian Alvarez’s goal, and they are now working behind the scenes to identify alternative targets to Paqueta.
90min understands that one player under consideration is Eberechi Eze, who has stood head and shoulders above his Crystal Palace teammates since Roy Hodgson was re-appointed as manager in March.
He ended the 2022/23 Premier League season with ten goals from 38 games, but showed his best form in the final stages of the campaign as Palace overcame their alarming slump in form to comfortably avoid relegation.
Eze was offered a contract extension earlier this summer, but 90min understands that he has declined to put pen to paper, casting doubt over his long-term future at Selhurst Park.