Davis helped Rangers' push for silverware last season
Rangers will no longer be able to use Daniel Cousin to part-finance the signing of Fulham's Steven Davis.
The agent for Davis, Rob Segal, claims the London club have ended their interest in the powerful Gabon striker.
The effect on Rangers is that they must now table a cash-only offer for the Northern Irishman to keep him at Ibrox.
Davis arrived from Craven Cottage on loan in January and is interested in a permanent move north, but could opt to fight for regular football at Fulham.
Segal said: "There is a certain amount of urgency now because I think Rangers are back in training in a few weeks and Steven definitely wants it concluded.
"The clubs are in conversation to see if they can come to an agreement. Hopefully we are heading in the right direction."
The midfielder had a successful four months at the end of last season and produced some excellent performances in Rangers' Uefa Cup run, particularly against Sporting Lisbon in the quarter-final second-leg tie.
His tenacity, stamina and clever use of the ball will have impressed Walter Smith.
Now the Rangers manager must decide if he can afford to spend a large chunk of his transfer budget on a single player.
Smith's decision would be aided, of course, if the Ibrox club could find another team interested in Cousin, who has made it clear his desire to play in the Premier League in England.