A club source soon after Keegan's constructive dismissal....
"Jimenez and Wise were on the trail of Sami Nasri, Bastian Schweinsteiger and Valmiro Valdo at Espanyol. They just lost out on Nasri to Arsenal and Schweinsteiger turned us down, even though he was offered £70,000 a week."
The people on Sunday....
"Keegan had lined up a deal to take Germany star Bastian Schweinsteiger to St James' Park for just 3million pounds and a very reasonable, by today's standards anyway, 30,000 pounds a week. But Ashley would not sanction the move and Schweinsteiger stayed at Bayern Munich."
The story as I'd heard it was that Keegan agreed to sell Milner on the condition Schweinsteiger was the replacement. Whether it was Keegan, Wise or Jiminez that suggested going for Schweinsteiger, the result was the same. Ashley didn't deliver on his promise.
The club claim of Schweinsteiger refusing a £70,000 wage offer is the part I'd question above all else though. 2 years down the line he's still earning less than £50,000 a week on his new Bayern Munich contract.
UPDATE - March 2017
"Jimenez said they had accepted the [Milner] bid and that it looked like they
could sign Bastian Schweinsteiger from Bayern Munich. Kevin said it was a
no-brainer -- just do it.
"Then Jimenez said that, as Kevin knew Karl-Heinz Rummenigge, who was
on the board at Bayern, could he give him a ring? 'What for?' he asked.
'To ask if Schweinsteiger would be interested in coming to Newcastle,'
he was told.
"Kevin was incensed. We were losing Milner but in
reality had no replacement lined up. I told him it was a joke and Kevin
replied, 'The swines have stitched us up.'
"There was only one
thing for it -- Kevin would have to ring Rummenigge. He ended up getting
Karl-Heinz on the phone and switched it to speaker mode. In English, he
explained the reason he was ringing him -- that he had been told by his
club they might be able to sign Schweinsteiger.
immediately started laughing. He revealed Bayern had received an email
from Newcastle that morning offering €5m for him. 'Kevin, we couldn't
stop laughing,' he added. 'If you had offered €50m we still wouldn't
have sold him -- but €5m?!'
"After the conversation ended, I looked at Kevin and he was ashen-faced.
We had lost a very good player with no suitable replacement. The club
had hoodwinked him."