However, Celtic have played down suggestions that the completion of the deal and a medical are imminent.

A Celtic spokesman said: “Nacho Novo was here for preliminary discussions and we will continue to monitor the situation.”

Dundee chief executive Peter Marr, meanwhile, has shrugged off a £350,000 (€522,000) offer by Rangers, claiming the Ibrox side were being “short-sighted” over the opportunities which would come with the arrival of Novo.

Novo scored 25 goals last season for the Dens Park club but has long been expected to leave this summer.

However, Dundee are on their way out of administration and will not allow the forward to go cheaply.

The interest from Celtic will come as no surprise with Hoops manager Martin O’Neill searching for a replacement for Henrik Larsson, who has joined Barcelona.

The Parkhead club have also been linked with a move for Chelsea forward Jimmy Floyd Hasselbaink.

But Novo has now become a focus of attention for the SPL champions, who can offer assured Champions League football as bait.

But Dundee manager Jim Duffy remains optimistic he can persuade Millwall to part with striker John Sutton on a year-long deal.

The FA Cup finalists agreed to allow the 20-year-old brother of Celtic forward, Chris, to leave before changing their mind.

Duffy has not given up hope of bringing the prolific hitman to Dundee but he did admit that the move was in danger of collapse.

He said: “A bit of a hitch has developed with the signing of John Sutton.

“We thought everything had been agreed on Monday, but Millwall got in touch and it emerged that, although everything is fine from our point of view and, I understand, from the player’s point of view, his club still have issues to sort out.

“These things happen all the time in football and all you can do is wait and see what comes now.

“We are keen to bring him to the club because he is a quality player who I believe would enhance our squad, but it is really up to Millwall.”