Ruud van Nistelrooy's Stg£18.5 million transfer to Manchester United collapsed dramatically last night when the Old Trafford club unexpectedly informed PSV Eindhoven that they were withdrawing their British record bid for the Dutch international striker.

The move came only 24 hours after Van Nistelrooy had been told that he had three weeks to prove his fitness and resurrect the deal. But his ambition of signing for the Premiership champions perished after he refused United's request that he undergo keyhole surgery to ascertain the full extent of the ligament damage caused to his right knee in early March.

He decided that if he was forced into even minor surgery, the operation would adversely affect his recovery programme and his chances of playing for Holland in the European Championships this summer.

"Ruud does not agree to these conditions because they will put in danger his rehabilitation at this moment," said PSV spokesman Pedro Salazar Hewitt.

"He just wants to get on with his rehabilitation and he has been doing very well. At this moment the transfer is at an impasse."

United last night confirmed that they were unable to proceed with the deal, the implication being that unless Van Nistelrooy agreed to the surgical examination the transfer was dead in the water.

In a statement they said: "We are very disappointed that the transfer cannot proceed at the present time. Manchester United wish Ruud every success with his rehabilitation programme and will continue to monitor the situation very closely in order to achieve our desire to make him a Manchester United player."

The PSV chairman Harry van Raay said he believed there was now a "less than 50 per cent chance" that Van Nistelrooy would be playing for United at the start of next season.

"The situation is very clear; it is down to a difference of opinion between the medical people at PSV and the medical advisers to United," he said.

"I won't be specific but the difference relates to tests to be done, and our club doctor has advised the player not to follow United's procedure. In my opinion the tests which have been suggested are just not possible.

"He has recovered very well, better than even our doctor expected, but even when he is recovering well and the knee is stable he does not seem able to do what the doctors of Manchester United feel is necessary to fulfil their medical tests."

Van Nistelrooy is adamant that he is fast approaching full fitness and insists that he plans to play at least some part in PSV's final league game of the season against NEC Nijmegen on May 14th. He has scored 29 goals for the club this season. Looking very sombre at a hastily-arranged news conference, he said: "I don't agree with what's happened as I feel I'm in a recuperation period.

"Everyone knows what the problem is and that at the moment that is the situation.

"It's an enormous disappointment if we can't sign. But it's also very clear that I have to stick to my principles however difficult it is. However the recovery is going well at the moment. The knee is improving. As long as I don't sign then I'm a PSV player."

He added: "I am not upset with the medical people, or with Alex Ferguson, but it is distressing that this has happened and that the move is now in great doubt," he said. "It is a matter of principle."

He injured the medial ligament in his right knee during a friendly game against the Danish club Silkeborg on March 6th and is believed to be at least five weeks away from returning to full fitness.

On Tuesday, United's planned unveiling of their new player was abandoned when it became clear that he was unable to negotiate a mandatory medical examination.

Van Nistelrooy spent much of the following day undergoing further tests at a private hospital in Cheadle, Cheshire, then flew back to the Netherlands in the evening having been told that he should return to Manchester in the middle of next month for another medical.

However, it would seem that United's insurers were so concerned about the player's long-term fitness that they insisted on him entering hospital immediately for exploratory surgery.

Van Nistelrooy turned down United's request and, in so doing, scuppered a deal which would have netted him about Stg£42,000 a week over the next five years.