Morata is understood to have agreed terms with United on a move to Old Trafford, but Blues owner Roman Abramovich has sanctioned a £70million bid and hopes to tempt the player to Stamford Bridge.
Chelsea boss Antonio Conte told Costa by text message that he was not in his plans for next season.
Morata appeared close to joining Manchester United (Photo: Getty Images Europe)
After returning from Juventus, Morata won the Champions League with Real (Photo: AFP)
And his former club Atletico Madrid will this week table a bid for him to return in January.
The Spaniards will propose an initial fee of £26m — £6m less than Chelsea paid for the player in 2014.
But with various performance-related add-ons they effectively plan to give the Blues their money back if a deal for the 28-year-old can be struck.
But while offers from China remain on the table, Costa is less open to a move there than he was six months ago.
Atletico are making the biggest play for him and the player wants to return to the club.
The only complication is that the Spaniards are prevented from any transfer dealings this summer after FIFA-imposed sanctions.
They will be free to trade in January but they need to convince Chelsea to agree to keep the player until December.
Atletico will also ask that he is left out of the Blues’ Champions League squad so he is not cup tied for the latter stages of the competition.
The text Conte sent Costa is understood to have wiped up to £10m off Chelsea’s potential asking price.
Chelsea have refuted claims of a rift between Conte and the board, including suggestions of a bust-up over his handling of the Costa situation.
Morata is eyeing a starting role for Spain (Photo: REUTERS)
And the move for Morata will be seen as evidence that the Italian, who is away on holiday, will not be going anywhere this summer.
The stumbling block for Chelsea and United is that Real would rather trade players and then work out cash differentials than focus directly on transfer fees.
The Spanish giants want David De Gea and would offer United Keylor Navas and Morata for the keeper.
While they would also take goalkeeper Thibaut Courtois, who is stalling on a new contract, from Chelsea if they could.