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Malaga’s Isco set for Bernabeu rather than Etihad.

Real Madrid have begun their rebuilding operation in earnest by opening talks with Malaga over the transfer of midfield playmaker Isco, reports Spanish source AS.

Officials from the Santiago Bernabeu are in talks with Malaga’s sporting director Mario Husilos and general manager Vicente Casado, as well as Isco’s representatives, which include the player’s father and lawyer.

The news comes just days after Los Blancos announced that head-coach Jose Mourinho will leave the club after the final two La Liga games of the season.

Malaga are reportedly holding out for 35m euros for Isco, 21, who has emerged as one of the brightest prospects in Europe with his performances at home and in the Champions League for Manuel Pellegrini’s side this term.

The Chilean tactician is set to join Manchester City as boss this week but Isco is unlikely to follow his mentor to the Etihad, despite long-standing interest in the youngster from Eastlands.

Ligue 1 outfit AS Monaco are also thought to be keen on Isco but Real are the clear favourites for his signature.

Francisco Martin Aguilar, a director at Malaga, confirmed strong interest in Isco from the Spanish capital.

“Madrid are very interested in him. But so far there is nothing official,” he said.

Isco has made 43 appearances in all competitions this season, scoring 11 goals and providing four assists.

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