The Welsh wonder has convinced Spurs they have to let him leave and move to the Bernabeu.
And boss Andre Villas-Boas is now willing to sanction a world record deal involving £85m in cash and Real’s exciting young striker Alvaro Morata, 20.
Spurs conducted talks with Bale at the club’s training ground in a last-ditch attempt to get him to stay.
But the north Londoners were clearly told by the 24-year-old that he wants to sign for the Spanish giants.
Morata’s growing reputation in Spain was enhanced when he was selected in the starting line-up for Real in El Clasico against Barcelona in March.
The 6ft 2ins forward set up Karim Benzima for the opening goal in a 2-1 win and has been tipped for big things in Spain.
Real president Florentino Perez has been keen to keep hold of top emerging talent, but is likely to let Morata leave now he has the chance to land Bale.
Tottenham have abandoned plans to use the money from Bale to buy Liverpool’s Luis Suarez because Levy is not prepared to smash the pay structure at the club.
The striker would cost in the region of £50m, but also demand wages of £150,000-a-week which would be way above what other players currently earn at White Hart Lane.
As Starsport revealed on Monday, Tottenham are looking at PSG’s Argentina playmaker Javier Pastore as a potential replacement for Bale.