Chelsea suspect that Terry may be using City’s interest in an effort to secure an improved contract. Chelsea would consider opening talks with Terry, whose present deal has three years left to run, but they will not be held to ransom and know that £40 million is a lot of money for a player who turns 29 in December.

Terry would stand to earn about £200,000 a week at City — compared with his existing wages of £135,000 a week at Chelsea — and is said to be impressed by the scale of the ambition at the Eastlands club.

When asked if the club would offer the defender an improved contract, Ancelotti said: "It's not my problem."

Ancelotti also confirmed that Chelsea have completed the signing of Yuri Zhirkov, the Russia winger.

Zhirkov, who has joined in an £18 million deal from CSKA Moscow, was one of 30 players nominated for European Footballer of the Year last October and has been earmarked as a left winger capable of putting pressure on Florent Malouda.