Malaga insist highly-coveted youngster Isco, who is wanted by Manchester United and Manchester City, is on course to sign a new long-term deal at the Spanish club.
The Spain Under-21 international has sparkled during his debut campaign in the Champions League this season and Malaga sporting director Mario Husillos feels the player is keen to continue his progress in Spain.
Speaking to Malaga Hoy, Husillos said: "Talks for renewal [of his contract] are still on track.
"The boy wants to stay at the club because it is clear that this is best for his development. Isco is intelligent and young and hasn't played that many La Liga matches."
Husillos also believes Isco will be more likely to move to Barcelona or Real Madrid than the Premier League if he leaves Malaga.
He added: "He will soon be in the Spanish national team and that will be the ideal time to exit. If in two or three years Real Madrid or Barcelona show their interest we will all understand that this is a step forward."