The 18-year-old was part of a £16.5 million deal that saw his former Partizan team-mate Zoran Tosic join the Red Devils last season and was due to team up with his fellow Serbian again next month.
The reigning Premier League champions had made moves to secure a work permit for the youngster in October, but have now decided to pull the plug on the deal.
A United spokesman said: “We had an option to buy the player but, having closely monitored his development over the past 12 months, and taken into consideration the young players emerging through the ranks at the club, we have chosen not to pursue the transfer.”
Partizan’s president Dragan Djuric, however, has denied the deal is dead in the water.
Djuric understands there may be a problem with gaining a work permit for Ljajic’s signature, but has also hinted United’s financial problems could be the reason behind the collapse of the transfer.
“I read the news in our media about the possibility that Adem Ljajic will not go to Manchester,” Djuric said.
“All this is in the field of speculation. The truth is that Manchester United has not yet arranged a work permit to our players, but so far none of them refused.
“Maybe the news came because Manchester United is in financial crisis but, believe me, we did not get anything official.”
Ferguson had previously spoken of his excitement at the prospect of adding Ljajic to the first-team squad in January and the Serb’s representative, Mladen Furtala, remains upbeat that the deal can yet be resurrected.
“As far as I know, the only problem is the work permit,” he said.
“Manchester can solve this quickly. Journalists called me, asking what was happening, but I am confident that everything will be OK at best and, that from January, Ljajic will be officially a Manchester United player.”
