The Bulgarian striker was supposed to have been on his way to Florence to finalise the deal after the two clubs had agreed on a price.
But they seem to have been given the brush off since Juventus and Fulham took up an interest.
And the 31 year old is thought to want to stay in England so the Cottagers have become favourites to get his signature.
All this prompted a statement from Fiorentina, which read: "ACF Fiorentina announce that the transfer for Dimitar Berbatov definitively collapsed after an agreement with Manchester United had been concluded (with shared exchange of contracts, the first instalment paid and the financial guarantees for the second instalment ratified) and after reaching a verbal agreement with the player over his contract," read the statement.
"During today the English club had allowed their player the written permission to come to Florence for a medical and to sign his contract.
"The player got on the flight with his agent and on tickets paid for by Fiorentina. He never arrived in Florence.
"This was down to outlandish and arrogant behaviour of other clubs, who have nothing to do with fair play and sporting ethics that go even beyond the confines of fairness.
"As for the player, apart from his characteristics and his value on the field, at this stage we are happy he didn't come to Fiorentina. He did not deserve our city, to wear our jersey or the values that represent it."
Source: FOOTYMAD
