Birmingham have pulled out of the £3million transfer of Tottenham midfielder Hossam Ghaly for what they describe as 'footballing reasons'.
Blues announced on Monday that they had agreed a fee for the Egypt international, subject to him obtaining a work permit.
Ghaly was due to sign a three-year deal with a further two-year option.
But now the move has been shelved by the midlands club and follows on from the collapse of the deal to sign another Tottenham player, Ghaly's compatriot Mido for £6million.
Birmingham, in a media statement, would only say: 'Birmingham City Football Club can today confirm that they will not be proceeding with the transfer of Hossam Ghaly from Tottenham Hotspur due to footballing reasons.'
Blues manager Steve Bruce was unavailable to explain the reasons behind why the plan to sign 25-year-old Ghaly had been abandoned.
It remains to be seen whether he remains at Spurs or is the target for another club.
Ghaly spent three years with Feyenoord before he moved to Spurs in January 2006. He has so far made a total of 34 appearances for Spurs and scored three goals.
Meanwhile, chairman David Gold believes the Birmingham fans will welcome central defender Liam Ridgewell 'with open arms' despite his previous association with Aston Villa.
Ridgewell ended an eight-year spell with Villa after joining Blues for £2million on a three-year contract deal with a further two-year option on top.
There is an intense rivalry between the two clubs in the second city which will be reawakened this season now that they are both in the Barclays Premier League.
But Gold is confident 23-year-old Ridgewell will be given a good reception by the City supporters and prove to be a valuable capture by manager Steve Bruce.
He said: 'I am confident Liam will come into the Birmingham side and do a good job and I am confident that our fans will take to him.
'There has always been banter between the two sets of supporters and, when they boo Villa or Birmingham players past and present, it is mainly just that - banter.
'Liam has chosen to come to Birmingham and I am sure our fans will soon forget the Villa thing if he plays well for us - which I am sure he will.'
Ridgewell followed hot on the heels of Fulham left-back Franck Queudrue in moving to St Andrews today and becomes Bruce's ninth summer signing.
Bruce had been tracking the former England Under-21 player for the past eight months after failing with a bid to sign him first permanently and then on loan from Villa during the January transfer window.
Bruce said: 'It is well documented that I tried to sign Liam in January and I am delighted he has agreed to come to us now. He has a lot of Premier League experience and is still only young and wants to do well.'
Gold is upbeat about City's chances of staying in the Barclays Premier League after viewing the overhaul of his squad of players by Bruce during the past three months.
He said: 'I am feeling a bit bullish about things and the manager has brought in some talented players and has bought wisely.
'There are also quality players here from last season such as Gary McSheffrey and Cameron Jerome whom I am confident can flourish this season.
'If Mikael Forssell can also maintain his sharpness, and he has looked good in pre-season, then that will also be like having a new player.'
Ridgewell slipped down the pecking order at Villa after the arrival of manager Martin O'Neill 12 months ago with Olof Mellberg, Martin Laursen and Gary Cahill ahead of him.
He is relishing the chance of re-establishing himself as a Premier League player after featuring regularly at that level during David O'Leary's final season in charge.
Queudrue, who has signed in a £2.5million deal, has also put pen to paper on a three-year deal. He spent five years at Middlesbrough before moving to Fulham last summer.
The arrival of Paul Konchesky last week at Craven Cottage put a question mark over his first-team spot this season and he will be battling it out with Mat Sadler for a place in the Blues line-up.