Los Blancos are unwilling to hand over their home ground, the Santiago Bernabeu, for the showpiece event because it will be contested by Barcelona and Athletic Bilbao.
When the Catalans and the Basques last met in the tournament decider, at Mestalla in 2009, the Spanish national anthem was booed by fans from both clubs.
Madrid seemingly want to avoid a repeat performance at the Bernabeu, leaving the RFEF in a difficult position given that the only venue of a similar capacity is Barcelona's Camp Nou, which would put Bilbao at an obvious disadvantage.
Consequently, a return to Valencia is now the most likely solution.
"We can not force Real Madrid to host the final at the Bernabeu," RFEF spokesman Jorge Carretero told Deportes COPE. "If we cannot play at the Bernabeu, it will be at Mestalla."
Barcelona have already expressed their view that the Bernabeu is the only viable option for the final because of its capacity of 85,454.
Starting in November and continuing through to the middle of February, Goal.com is publishing exclusive extracts from Graham Hunter's highly-anticipated new book, 'Barca: The Making of the Greatest Team in the World'. The last extract looked at how Barca suffered rare disappointment at the hands of Real Madrid in a gripping finale to last season's Copa del Rey. Don't miss it!