A report in The Sun says Leeds made a £3.5m agreement with Spurs when keeper Paul Robinson’s move was being arranged last week.
With Leeds desperate for cash, Milner, 18, is being touted around the Premiership in a bid to raise more than the sum offered by the Londoners.
A Leeds insider revealed: "James is an exceptionally talented player but it is impossible for him to stay with Leeds as, with the amount of debt they are in, they need money and quickly.
"Tottenham want James to become part of the team they are building and I know they would be annoyed if they were aware the player is being touted around instead of their agreement being honoured."