The Daily Mail report that the Spaniard has so far failed to agree a new deal at St James’ Park.
Benitez and owner Mike Ashley have yet to solve a number of issues between them, including the club’s approach in the transfer market.
And despite his popularity with supporters, Benitez is prepared to bring his three-year association with the Magpies to an end.
It would take a dramatic turnaround to resolve the situation, with no talks planned for the coming days.
Benitez has received a lucrative offer from Chinese outfit Dalian Yifang but would prefer to stay in the European game.
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