Atletico officials claim Reyes signed a pre-contract which specifically stated damages of two million dollars should the player sign for another club though Reyes, who was due to play for Spain in Saturday's Euro 2008 qualifier against Liechtenstein, denied he has signed any such contract.

However Atletico sporting director Jesus Garcia Pitarch said: "I have no doubt that Atletico and their legal department will demand the pre-contract be respected."

Arsenal and Real on Thursday agreed a one-year loan swap with Reyes going to the Bernabeu and Brazil striker Julio Baptista joining the Gunners.