James, 24, has been a long-term United target and the Daily Express reported in January that talks had been held with super agent Jorge Mendes over a move.
The Colombia international looks to be heading for the Bernabeu exit door after a disappointing second season.
And Spanish news outlet Fichajes claim the emergence of midfielder Casemiro has convinced Real Madrid boss Zinedine Zidane to consider James and Spain international Isco's futures.
Isco is reportedly more likely to be shown the door but James can go if a big bid is submitted.
Spanish football expert Guillem Balague previously claimed the club are actively looking to sell James.
He said: "I think James has been treated a bit unfairly.
"However, the players are well aware that when they play well, they will get lots of nice things said about them.
"It bothers me when people speak ill of James because he's my player. James is committed to the cause."
Real Madrid signed James from Monaco in July 2014 for a fee of £63m after he won the Golden Boot at the World Cup.
He scored 17 goals and grabbed 18 assists in his debut season but has netted just six times this term.
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