The Manchester City academy graduate left a lasting impression on the Champions League holders after scoring a wonder goal against them back in pre-season and they have now put feelers out in his direction.
Diaz, 18, made his second first-team appearance in the dying minutes of the recent Champions League win over Feyenoord and, along with Phil Foden, is rated the hottest young prospect at the club.
Real, however, are aware Diaz has less than two years left on his present deal and is in a hurry to accelerate the progress he has made, hoping the lure of returning to his homeland could turn his head.
The Citizens, however, plan to sit down with his handlers, Media Base Sports, owned by Pep Guardiola’s brother, Pere, which makes it especially difficult for the current Bernabeu overtures to be successful, unless the midfielder does not actually want to commit to a new long-term deal.
Sheffield United could have leading scorer Leon Clarke back for their home game against Nottingham Forest.