Spurs are also set to receive a bid for Tom Huddlestone from Fulham, which they will consider, and will send midfielder Jake Livermore on loan to Queens Park Rangers for the rest of the season in what is shaping up to be a busy January transfer window for the club.
Having signed Lewis Holtby from Schalke on a free transfer, Spurs held further talks with the German club over whether the 22-year-old attacking midfielder could join them this month for a nominal fee. However, it was decided that Holtby, who will captain the Germany under-21s in the forthcoming European Championship in Israel, would join Spurs in July when his contract expires.
The signing of the attacking midfielder, who can also play on the wings, is a significant coup for head coach Andre Villas-Boas, who beat off strong competition from Liverpool and Arsenal.
Villas-Boas is acutely aware that he does not want to upset the balance of his squad too much, and make too many changes, but he is nevertheless a long-term admirer of Damiao, who was the top scorer in last summer's Olympics, with six goals in five appearances, and currently plays for Brazilian club Internacional. Damiao, 23, has 14 full caps for Brazil and is a tall, powerful striker. Spurs have had offers for Damiao rejected in the past.
It is believed that Villas-Boas is keen on the deal but if Damiao is not signed he will manage with Jermain Defoe and Clint Dempsey as his two strikers if, as is now expected, Adebayor relents and joins the Togo squad for the ACN tournament in South Africa.
Adebayor has until midnight on January 9 to decide but, having retired from international duty in April 2010 after the terrorist attack on the Togo team bus, which left three people dead, in Angola during a previous tournament, it appears he has had a change of heart. He returned in November 2011 only to quit again over a pay dispute.
Fulham, managed by former Spurs manager Martin Jol, have expressed interest in Huddlestone in the past and were linked with a loan move on last August's deadline day. It is believed they have reopened talks over a permanent transfer for the midfielder but are yet to make a bid and Villas-Boas may be reluctant to lose him at this stage of the season.
Meanwhile, it is far more likely that Livermore will be allowed to go on loan to QPR and be reunited with another former Spurs manager, Harry Redknapp, who confirmed on Friday he wanted to sign the midfielder. Spurs also completed the signing of former Manchester United defender Ezekiel Fryers from Standard Liege last week.
Last week, Everton – who have debts of £46m – announced losses of £9.1m and Moyes has long since admitted there is no money to spend in the transfer window. The club readily accept they have to sell players to help manage the finances. But even against that backdrop, experienced players like Jagielka are prepared to commit their long-term future as a two-year extension will now keep him at Goodison Park until 2017.