Bale is unwanted in the Spanish capital and is ready to leave after being frozen out over the last few years.
The Telegraph have reported a return to Spurs looks as likely as ever and agent Jonathan Barnett said it is "where he wants to be."
Madrid are willing to let their former record signing go as long as Spurs pay 50% of his wages while they take Alli and pay 100% of his wages.
It means the North London outfit would be paying the Welshman £300,000-a-week, with £150,000 being freed up by Alli's departure.
Alli was substituted at half time during Sunday's 1-0 loss to Everton and manager Jose Mourinho has been critical of his attitude in Amazon's 'All Or Nothing' documentary.
The England international made 25 appearances in the Premier League last season, scoring eight and assisting four.
Spurs chairman Daniel Levy is "obsessed" with bringing Bale back, who became one of the club's most popular players before leaving in 2013.
Bale helped carry Spurs to a fifth place finish while scoring 26 goals in all competitions before sealing a move to 'Los Blancos.'
"Gareth still loves Spurs," Barnett told BBC Wales. "We are talking (Spurs, Real and Bale's camp). It's where he wants to be."
The 31-year-old has been mooted as a target for Manchester United should they fail to sign Jadon Sancho from Borussia Dortmund.
#thfc have moved ahead of Manchester United in the race to sign Gareth Bale from Real Madrid. [ESPN]- Hotspur Related (@HotspurRelated) September 15, 2020
Ole Gunnar Solskjaer is keen to sign a right winger this summer and sees Bale as an experienced alternative.
When asked about a Premier League return earlier this month, Bale replied: "It's one of those situations if those options arise it's something I would look at, for sure. We'll see what happens.
"We have plenty of time in this transfer window and I guess a couple of others as well. Time will tell.
"It's not really in my hands, the decision is in Real Madrid's hands. They make things very difficult to be honest."
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