A return to the financially-troubled Rossoneri appeared to be on the horizon for the Brazil international, but the two clubs are yet to come to an agreementhere.
Real Madrid have no intention of allowing Kaka to join AC Milan on a one-year loan deal and are holding out for a permanent transfer, Marca reports.
The Serie A giants are desperate to lure the Brazil international back to San Siro this summer, and have already held talks with the player's agent to discuss a potential move.
However, the Rossoneri's dire financial situation complicates matters, and the club are hoping to sign Kaka on loan without paying a fee, while requesting that Madrid continue to pay 50 per cent of the midfielder's wages.
Los Blancos have no interest in such a deal, though, and will only let go of the Brazilian on a permanent basis.
Talks between both clubs will continue in the upcoming days, and the Liga champions will insist that Milan table a serious offer soon in order to take negotiations to the next level.