The Croatia international has stated his desire to leave Tottenham after the White Hart Lane club failed to qualify for the Champions League for the second consecutive season.
Spurs are willing to listen to offers for their key midfielder, but will not compromise on their asking price, believed to be in the £40 million region.
As talks between the clubs continue, Karanka has admitted that Modric is a player that fits into Madrid’s footballing mentality.
“Which club would not want a player like him?” he told AS, translated to English by The Daily Mail.
“He is an outstanding footballer and had a great tournament (Euro 2012). It is clear that he would fit in Madrid.”
Modric has been identified as Kaka’s potential replacement in the Spanish capital, but Karanka also said that the Brazil international would not be sold.
“We decided he would stay in Madrid. Kaka and the club are working to find a good solution for all parties,” he concluded.
By Gareth McKnight