Marseille had agreed terms with Real Madrid for the midfielder, who was also ready to leave for France.
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However, after asking OM for 24 hours to reflect, the French giants abruptly pulled out of the deal, informing Ceballos' camp that there was no way back.
Marca says Ceballos is now in limbo, with the Spain international not in Real coach Xabi Alonso's plans.
However, former club Real Betis are keen and would jump at the chance of bringing back their former midfielder. The stumbling block could be Ceballos' wage demands, with his Real salary far outstripping Betis' budget.
