Rangers were reported to have had a £9million offer accepted for the England centre-half on Tuesday but the deal appears to have hit a snag.
Now Spurs manager Andre Villas-Boas insists he will not be upset if Dawson, 28, remains at White Hart Lane.
"I had an open chat with Michael, I explained we have five central defenders here," said Villas-Boas.
"But he’s a great professional and if he is still here at the end of the transfer window it will be a privilege for me."
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