Milan owner Silvio Berlusconi made the dramatic announcement live on Italian television shortly before 2300 local time, and hailed the 26-year-old for putting football prowess before wealth."Kaka is staying at Milan," Berlusconi announced. "When I heard him say that he prefers to stay, that he doesn't feel like he has lost the opportunity to earn a higher salary and that he feels privileged to wear the jersey, he values the closeness and the friendships, the heat and affection that all the fans have shown him even in these last two days, I smiled and we hugged.
"He has taken himself off the market with this decision to remain tied to the contract he has with Milan. He was tied to Milan by a signature on an official piece of paper, but now he has signed with sentiment, signed with the heart.
"Kaka is a great champion and a great man. He turned down the offers from Manchester and preferred Milan, his teammates and his fans.
"He said no because money isn't everything in life. Money is important but there are also other things that are more important.
"As a fan I'm very happy. Kaka turned down a ton of money and it's a decision worth admiring."
Media reports said Manchester City, who became the world's richest club after they were taken over by the Abu Dhabi United Group in September, had bid 120 million euros (£107 million) for one of football's most-coveted players.
"I feel great in a place where everybody loves me and I'm very happy to stay," Kaka told Milan Channel via a telephone interview following the announcement. "There have been some news stories over the last few days that have made my father look bad. It's not like that, I have never argued with my father.
"My decisions are always made within the family. My wife has been wonderful, she has helped me and has always supported me in all my decisions. My family has been fantastic and has never pushed me in one direction or the other. In the end my history made the difference - where I have ties and where in reality my heart is.
"All the messages I received told me to choose with my heart and I think in the end that is what I did. It certainly wasn't about the money.
"I have to thank Galliani, Berlusconi, and Leonardo who is more than a friend. Now I just want to put this behind me and win."
Kaka, courted by Real Madrid last year and also linked with Chelsea in the media, played in Milan's 1-0 home win over Fiorentina on Saturday night and was overwhelmed by the response of the crowd at the San Siro who unfurled countless banners asking him to stay.
"The match on Saturday was extraordinary, I was very moved, also by the many children who drew pictures for me.
"When I left Sao Paulo some of the fans were challenging me. Now all the fans are here shouting my name - I'm very happy.
"I'm at home celebrating with a couple of friends. Milan is my home, not even for thirty seconds did I think about going to Manchester City."
Earlier hundreds of Milan fans had protested over the possible sale in the pouring rain outside the club's city centre headquarters in Via Turati. Fans had also gathered outside Kaka's Via Aurelio Saffi home and he responded by beating his hand on his heart while holding a Rossoneri shirt on his balcony.
"Heart has prevailed on the matter," vice-President Adriano Galliani added on Milan Channel.
"The fans should once again thank President Berlusconi for this financial effort, because it was a strong temptation when faced with such astronomical, record-breaking figure."
Shortly after Berlusconi's comments, Manchester City released a statement saying an agreement with the seven-times European champions was not possible.
"Following a meeting in Milan today, the club felt that it was unlikely that the two parties could reach common ground for an agreement," read a statement. "The discussions reached only a preliminary stage and the player was not involved at any time."
The dramatic late development came at the end of a day when it seemed Kaka was heading for the English Premier League in a deal that would've shattered the current world record for a transfer which was set by Real Madrid when they paid £46 million to Juventus for Zinedine Zidane in 2001.
After holding talks with Berlusconi, Galliani and other club officials held meetings with a delegation from Manchester City and then with Kaka's advisers and his father, Bosco Leite.
Some television, radio and Internet websites reported the deal was all done, before the surprise intervention from Berlusconi.
Galliani reportedly first met with Manchester City officials last Tuesday to discuss their interest in the 2007 Ballon d'Or winner and FIFA world player of the year.
City officials sounded confident about their chances of signing the Brazilian star and at the weekend Berlusconi said it would be tough to hang on to the player given the sums being discussed.
Kaka joined Milan from Brazilian outfit Sao Paulo in 2003 and has since won the Serie A title, UEFA Champions League and FIFA Club World Cup.
The attacking midfielder has scored 86 goals in 244 appearances for Milan while he has also picked up 62 caps for Brazil, scoring 23 times.
Kaka is under contract at the San Siro until 2013.
Source: Various
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