The Spanish giants are believed to be in the market for a playmaker this winter, after allowing Kaka and Mesut Ozil to leave the Bernabeu over the summer.
Silva is rumoured to be one of their top targets, with the midfielder valued highly in his homeland.
Real are keen to tempt the assist machine back to Spain ahead of the 2014 World Cup, but City are desperate to keep him in the sky blue shirt.
As a result, the last season’s Premier League runners-up have slapped a huge £50m valuation on the 27-year-old.
Manuel Pellegrini is hoping that this will deter Real, who are unlikely to splash the cash once again after spending almost £150m over the summer.
Silva has some time to run on his current deal, and is valued highly by the Chilean.
Meanwhile, City target Andres Iniesta has not yet penned a new contract with Barcelona.
The midfielder has said that he is keen to stay at the Nou Camp, but the Citizens may pounce if there are any signs of unrest.
Should Manchester City fight to keep David Silva? Or would £50m be a good fee for the midfielder?
Have your say below!