Manchester United risk losing Cristiano Ronaldo to Real Madrid after it emerged last night they had turned down the player's wage demands for a new contract, believed to be in the region of £140,000 a week. United have had two meetings with Ronaldo's agent, Jorge Mendes, but the two sides are still a considerable distance apart in their valuation of the player.

The club remain optimistic they can reach a compromise, one that would see Ronaldo overtake Rio Ferdinand as the club's highest-paid player on around £120,000 a week, but with Madrid lurking in the background their refusal to pay the Portuguese winger what he wants means they are playing a dangerous game.

Madrid have made it clear, via strategic leaks to the Spanish press, that Ronaldo is a confirmed target and, with David Beckham soon to be taken off the Bernabéu payroll, they are understood to have the financial muscle to meet Ronaldo's demands and pay him £1m more a year than United over the next five seasons. Ferguson reiterated his belief yesterday that Ronaldo was at "the right club" and United's directors have signalled their desire to keep him by drawing up a contract that effectively doubles his wage.

"This is what happens," said Ferguson. "It is a negotiation. We've had a couple of meetings with his agents and it is always the same with every contract you sign with a top player. We have ideas and they have ideas and, through negotiation, you come together and both parties are satisfied - not necessarily happy, but satisfied the deal is concluded and agreed.

"The great thing is that we have him [contracted] until 2010 so there is no desperation about it. It's an amicable arrangement in the sense that we said to Cristiano: 'We'd love you to sign another contract.' We spoke to his agents and they were happy. The boy was happy so we are trying to get to the final conclusion and get him signed for another two years, to 2012, which is the right thing for our club."