Having entered the final year of his Eastlands deal, Sturridge is in a position of real strength, as a number of other suitors continue to monitor his situation closely.
While Sturridge has impressed whenever called upon, Hughes points to the fact he has made only five Premier League starts to date.
Five goals in 11 appearances in all competitions is testimony to the player's potential but a reported demand of around £65,000-a-week, a figure claimed in a number of national newspapers, has fallen on deaf ears in the City boardroom.
Hughes is determined to balance lavish spending with the development of young talent and sees Sturridge as a key part of his plans.
He will not, though, be held to ransom.
Outstanding talent"We want Daniel to stay because he's an outstanding player but we are now in a situation where he is in the last year of his contract," Hughes told The Times.
"Because of that, he knows, and his advisers know, that puts him in a position of strength when it comes to the terms of his contract.
"But there has to be an understanding from his advisers that there is a level for everybody. Daniel has made something like five Premier League starts and is still making his way in the game."
Hughes went on to reveal his frustration at the manner in which negotiations with the player's representatives had gone to date.
"At the moment, we're not even close to an agreement," he said. "We've made it clear we feel, for the sake of the player, that this is the best place for him.
"Unfortunately, other things seem to be of more importance to the people around him, but we're trying to make sure Daniel is here and not anywhere else."