Rangers have not given up hope of signing Steven Davis, the Fulham midfield player, despite the West London club placing a £4 million price tag on the Northern Ireland international’s head.

Fulham have come back to Rangers over the past 48 hours in a renewed effort to conclude a deal for Davis, though Rangers insist that anything approaching £4 million is beyond their budget. The Ibrox club are believed to be offering nearer £2.7 million.

Davis has indicated his desire to make a permanent move to Ibrox following his loan spell last season, which coincided with Rangers reaching the Uefa Cup final.

Walter Smith, the Rangers manager, hinted strongly yesterday that the haggling over Davis had not been exhausted, and that a deal could yet be sealed.

“We haven’t been able to reach an agreement with Fulham on Davis, which is disappointing,” said Smith. “It’s frustrating, because we know that the lad would like to come to Rangers.

“Fulham came back to us on the deal, but we can’t agree on the financial aspect. So that’s where it stands at the moment. It’s disappointing for both parties because Steven has indicated that he would like to join us.

“It is still early, though, in the sense that there are still five weeks of the transfer window to go. But that’s where things stand just now.”

Rangers are also chasing Glenn Loovens, the Cardiff City defender, though Cardiff are wanting to extract a maximum price for the player. Meanwhile, Smith dismissed reports that he was trying to sign Pedro Mendes, the Portsmouth midfield player.

“It’s not easy trying to sign players of quality,” said Smith on the eve of Rangers’ pre-season friendly today against Raith Rovers. “Adding guile to the team is not cheap. Guile is quite expensive, as both Celtic and Rangers are currently finding.”