Real Madrid have option for Liverpool target Lugano

Real Madrid are understood to have an option on Sao Paulo defender Diego Lugano.

The Uruguay international is being lined up by Real for the winter market, in the event that Jonathan Woodgate fails to fully recover from his knee rehab.

Sao Paulo confirmed last week an offer had been rejected from Liverpool for Lugano.

But if they're to try again, the Premiership giants will have to get behind Real Madrid, which are understood to have gained first refusal on Lugano for £5 million after crunch talks with agent Juan Figer before last Wednesday's transfer deadline.