Winger Charles N'Zogbia will not be joining Blues after talks to sign him broke down irrevocably.
Birmingham City agreed a club record fee with Wigan Athletic and a transfer was agreed subject to personal terms. An offer was made that was accepted by the player, but then the goalposts were moved.
Manager Alex McLeish told bcfc.com: "We did everything that was asked of us and then the goalposts were moved at the last minute.
"It was very important to us as a club to stick to our principles and look after the longterm interests of Birmingham City as we are custodians of the club.
"We remain ambitious and committed to adding extra quality to the playing squad but this deal became one that was not in the interests of the club.
"The Board worked with me extremely hard to try and get this one over the line and I thank them for their support."
Blues remain absolutely determined to signing players who want to come to the West Midlands and play for Birmingham City for all the right reasons and senior club personnel will continue to work extremely hard to that end.
