Barcelona have confirmed they are in negotiations to sign Portugal playmaker Deco once Euro 2004 ends.
The Catalan club are set to announce the arrival of Sweden striker Henrik Larsson and Deco, who is also being courted by Real Madrid, could join him.
"We're taking the necessary steps but there's still a lot in the air," said director of football Txiki Begiristain.
He added Deco "had demonstrated his desire to play for Barca", but insisted that talks were in the initial phase.
Chelsea were favourites to sign the Brazilian-born star after the arrival of his former coach Jose Mourinho at Stamford Bridge.
But they appear to have pulled out of the race to sign Deco, who seems certain to leave Champions League winners Porto, leaving bitter rivals Barcelona and Real to fight for his signature.
A Porto spokesman told BBC Sport earlier this month: "There is no agreement with Chelsea to sign Deco. Our President has also told me Real Madrid are interested in Deco.
"There is also a chance that Deco will stay with us next season."
Deco scored the second goal in Porto's 3-0 win over Monaco in the Champions League final in May.
The midfielder has been a key member of Portugal's squad since he acquired Portuguese citizenship in March 2003.
The Catalan club are set to announce the arrival of Sweden striker Henrik Larsson and Deco, who is also being courted by Real Madrid, could join him.
"We're taking the necessary steps but there's still a lot in the air," said director of football Txiki Begiristain.
He added Deco "had demonstrated his desire to play for Barca", but insisted that talks were in the initial phase.
Chelsea were favourites to sign the Brazilian-born star after the arrival of his former coach Jose Mourinho at Stamford Bridge.
But they appear to have pulled out of the race to sign Deco, who seems certain to leave Champions League winners Porto, leaving bitter rivals Barcelona and Real to fight for his signature.
A Porto spokesman told BBC Sport earlier this month: "There is no agreement with Chelsea to sign Deco. Our President has also told me Real Madrid are interested in Deco.
"There is also a chance that Deco will stay with us next season."
Deco scored the second goal in Porto's 3-0 win over Monaco in the Champions League final in May.
The midfielder has been a key member of Portugal's squad since he acquired Portuguese citizenship in March 2003.
