Preferred candidate Malky Mackay is out of the running to take charge of Crystal Palace after the English Football Association opened an investigation into the conduct of the Scot during his time at Cardiff City, British media reported.
The Daily Mirror and Daily Mail both reported that the FA were looking into a series of text messages sent between Mackay and Crystal Palace director of football Iain Moody when the pair worked together at Cardiff. The FA did not answer calls from Reuters about the matter.
Moody left his role as head of recruitment at the Welsh club at the end of last year after being suspended by Malaysian owner Vincent Tan with Mackay sacked in the final days of 2013 after a public disagreement over transfer spending.
Moody then joined Palace shortly after with Tony Pulis then taking over as manager of the South London club and leading them to an 11th place finish in the Premier League last term, while Cardiff were relegated.
But Pulis, who was named Premier League manager-of-the-season after his work steering Palace away from relegation, rocked the club by standing down as boss two days before last week's opening fixture against Arsenal.
Former Scotland defender Mackay had been expected to sign a three-year contract to take charge of Palace and reunite with Moody this week ahead of Saturday's London derby at home to West Ham United.
Both newspapers said that Moody was expected to resign from his post after the FA opened an investigation.
British media also reported that former England manager Glenn Hoddle, who had just taken an assistant coach role at London rivals Queens Park Rangers, had also turned down the job after an approach from Palace co-chairman Steve Parish on Wednesday.
British media speculated that Tim Sherwood, who took charge of Tottenham Hotspur for six months last season, had become favourite to replace Pulis but that the deal would not be concluded this week.
That would mean Keith Millen, who oversaw the opening 2-1 defeat by Arsenal, would continue in temporary charge of first team affairs.