The Champions League winners want the Colombian marksman to head up their new look attack but the Spanish club require Torres in exchange who they view as a ready-made replacement as they challenge Barcelona for the La Liga title.
Torres, started his career at Atletico and spent eight years there before joining Liverpool in 2007 from whom he made a dramatic £50m switch to rivals Chelsea on deadline day.
It appears that Chelsea would be willing to offload the misfiring Spaniard who has failed to shine after joining the club in January 2011 and the 28-year-old may have some interest in a move home in order to regain his form while also giving himself a better chance to regain his place in the national team.
Falcao, 26, who moved to La Liga from Porto for £35m in 2011, is one of the highest-sought after players in world football following some sensational performances for Atletico and the Blues will face strong competition from big-spending Paris St-Germain and Manchester City who are also extremely interested in the striker.
However reports suggest that by including Torres as part of the deal they would take priority in any future transfer while also ensuring the club stay within UEFA’s Financial Fair Play guidelines despite splashing out nearly £80m on new players during the summer.