Everton manager David Moyes has admitted his interest in James McFadden but fears missing out on the Scotland forward as Celtic close in.
Celtic have been in talks with the 28-year-old this week and manager Neil Lennon wants to assess him in training.
But Moyes told the Premier League club's website: "We have been talking to James and the people behind him for the last few weeks.
"It could happen but I would say it's probably going against that now."
McFadden made more than 100 appearances in five years with Everton before moving to Birmingham City.
But the midlands club decided against extending his contract by two years at the end of last season following a long period on the sidelines through injury and their Premier League relegation.
McFadden recently spent two weeks at Wolves, where he received a contract offer but Celtic confirmed he had been in talks with chief executive Peter Lawwell this week.
Lennon said: "We are hoping he is going to come up and train for a few days.
"He's a player that I've liked for quite a while, he is a very creative player and has good qualities and he is available."
McFadden suffered cruciate ligament damage in September 2010 but is now at the stage of seeking match fitness.
Lennon added: "He's got goals and is a good character - we are hoping we can get something sorted out in the next few days.
"He's been out for a while but I know he has done some rigorous tests down south and passed them all.
"It would be remiss to sign him on the back of that, so we will have a look at him first.
"We have been in talks with James obviously, I have spoken to him and Peter Lawwell has been talking to his advisers.
"Whether a deal is agreed yet, I don't know, but there is genuine interest from us.
"It could be short-term until the end of the season and, if things go well, it could be longer term."
McFadden moved to Everton from Motherwell for £1.25m in 2003 and spent five years at Goodison Park before heading for Birmingham in a £5m deal.