Sunderland have ended their interest in Peter Crouch, leaving Tottenham and Fulham battling over the Portsmouth striker's £12million signature.
The Black Cats agreed personal terms with the 28-year-old when he travelled to Wearside to meet manager Steve Bruce and discuss a proposed £12million last Thursday.
However, Sunderland have decided not to pursue the matter further, believing the England international wants to remain in the south with Fulham and Tottenham also targeting him.
Bruce told the club's official website: "Naturally this is hugely disappointing for us as Peter was one of our primary targets.
"I know he was impressed with the set up here when he came for talks, but it's simply a matter of geographical location and that's not something we can affect.
"What's pleasing however is that it shows the intent of the club going forward that we are trying to bring in players of his calibre, and we will continue to pursue other targets.
"We have a number of irons in the fire at present and we will be looking to make several additions to our squad in the coming weeks."