Birmingham City have refused to accept Alex McLeish's resignation as manager and are seeking financial compensation, BBC Sport understands.
The Scot has been linked with a move to Aston Villa, who on Monday contacted the Blues acting chairman Peter Pannu about his availability.
But BBC 5 live's Midlands football reporter Pat Murphy said Pannu insisted McLeish was not available for talks.
It is believed City are looking for compensation of up to £5m.
"Mr Pannu's response [to Villa's enquiry] was concise: 'It will cost you as he's still our manager as far as we are concerned'," Murphy said.
- Joined Aberden in 1976
- Spent 15 years with the Dons, playing under Sir Alex Ferguson
- Won 77 caps for Scotland
- Managed Motherwell, Hibs and Rangers in Scotland
- Guided Gers to domestic treble in 2003
- Became Scotland manager in January 2007, beating France 1-0 in Paris later that year
- Joined Birmingham in November 2007, saw them relegated in 2008 but brought them back at the first attempt
- Guided Birmingham to Carling Cup triumph in February 2011, but Blues are relegated on final day of the season
The acting chairman is meeting legal representatives on Monday.
Pannu has described McLeish's resignation, via email on Sunday, as "irresponsible".
The former Rangers manager has two-and-a-quarter years remaining on the contract he signed at St Andrew's in November 2007.
Pannu told the Daily Express: "He is still our contracted staff and Birmingham City FC does not grant him any right to speak to any outsiders until the matter is resolved.
"It's about time discipline is instilled into this game and I am not a person who gets pushed about."
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