Mamadou Sakho wants to play for a Champions League club next season.
Sakho, who is surplus to requirements at Liverpool, starred for Palace during a loan spell last term.
And the Eagles want to sign the £30m-rated French defender permanently this summer.
But the Telegraph claims Sakho has set his sights higher than the south London club, with a preference to play in the Champions League.
That news would imminently rule out Palace and Southampton, who are also interested in signing the former Paris Saint-Germain man.
Despite only playing eight games for the Eagles, Sakho shored up a leaky defence and helped the club to Premier League survival.