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The Spanish giants have opened tentative discussions with City over a possible swap deal, which includes €28m cash and one of the two big-name strikers moving to Eastlands.
Madrid manager Jose Mourinho is a big admirer of Tevez and wants to reunite the Argentine with his former Manchester United team-mate Cristiano Ronaldo.
Goal.com understands that sealing a deal for Tevez, who released a statement earlier this week to announce he wants to leave City this summer, is a bigger priority for Mourinho than signing Atletico Madrid’s Sergio Aguero, a transfer which is complicated by the rivalry between the two capital city clubs.
The Portuguese is not completely convinced by Benzema despite his 26-goal haul last season and is also concerned about the injury record of Higuain, who scored 13 goals in 25 games but missed four months of the campaign with a back injury.
The Bernabeu outfit value both players around the €28m mark but City manager Roberto Mancini will have the final say on whether he believes they will fit into his squad.
City are adamant that they value Tevez at €56m and will not allow him to leave for a reduced sum. The Premier League club are believed to have paid more than €45m to sign the 27-year-old from his third-party owners Media Sports Investment in 2009.
The talks between Real and City are at an early stage and will also have a significant bearing on the futures of Aguero and Emmanuel Adebayor, who is wanted by Mourinho but will be independent of a transfer involving Tevez.
City have already opened negotiations with Atletico about signing Aguero, who has a €45m release clause in his contract.
The Premier League club have no plans to pair up Aguero and Tevez and view the 23-year-old as a natural replacement for his international colleague rather than a potential strike partner.
After it emerged that Juventus had offered Atletico €36.5m for Diego Maradona’s son-in-law, the Spanish club claimed City had already bid €41.5m.
With January signing Edin Dzeko and Mario Balotelli already at Eastlands, it remains to be seen whether Mancini will regard either Benzema or Higuain as the player he needs to reinforce his squad.
However, City are keen to offload Adebayor, Craig Bellamy and Roque Santa-Cruz as they attempt to free up space in their squad and reduce their wage bill in order to meet the new financial fair play requirements.
It is understood that the Manchester club will not name any of their trio in their 25-man Premier League squad.
City are believed to have told Madrid that if they pull out of the race for Aguero that Adebayor will be offered to the Spaniards at a ‘discount’ rate, of between €6-8m.
The former Togo international has indicated that he is willing to take a pay cut to force through a transfer to the Bernabeu. The former Arsenal man is believed to earn around €190,000-a-week at Eastlands.