The Belgian midfielder held talks with Fulham boss Rene Meulensteen last week over a potential switch to west London, but Porto have now pulled the plug on the deal.
The 25-year-old, who once courted interest from Manchester United, was supposed to be ‘keen’ on a switch to Craven Cottage, according to his agent.
However Porto decided they could not afford to let another midfielder go, after allowing Argentine midfielder Lucho Gonzalez to join Qatari club Al Rayyan SC.
“Now Lucho’s gone, Steven has to grab his chance as Lucho was the one blocking him,” his agent said.
“Steven was keen on joining Fulham. A few days ago, he even called Rene Meulensteen to discuss a transfer.
“He really wanted to move to Craven Cottage, where he could have signed for three-and-a-half years with an option.”
Defour – who would have cost in the region of £6million – was desperate to leave the Estadio do Dragao this month, in an attempt to enhance his chances of appearing for Belgium at the World Cup.
Aston Villa were also linked with a move, although Paul Lambert’s side failed to act upon their interest.