Spurs have long been admirers of the 22-year-old, who scored three goals in 23 La Liga appearances last season.
Real are said to be willing to consider offers worth at least £45million, although the figure in the player’s release clause is closer to £450m.
Arsenal are said to be interested in signing Tottenham target Dani Ceballos from Real Madrid
According to AS, Arsenal are prepared to pay £45m but, at that price, Real may insist on a buy-back clause forming part of the deal.
Ceballos is happy in Madrid and keen to prove his worth to Zinedine Zidane but may be tempted by the challenge of playing in the Premier League.
Despite Arsenal’s interest, AS claim that Spurs remain the favourites to land Ceballos, having already held talks with him.
Ceballos joined Madrid from Real Betis in 2017, having made 98 league appearances for the Seville outfit.
He is currently at the European Under 21 Championship with Spain and scored twice in three group games.
Ceballos, 22, has been in fine form for Spain at the European Under 21 Championship in Italy