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 agreement
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.