Madrid are ready to pay in excess of the £80million they spent on Cristiano Ronaldo, but Tottenham are thought to be holding out for even more.
Madrid ramped up their public pursuit of the 24-year-old towards the end of last month, with a number of the club's playing staff, and manager Carlo Ancelotti, praising the player.
But talks between the two clubs appear to have reached an impasse recently. Ancelotti said last week that he did not need to add any more players to his squad and it is understood that reports of the two clubs agreeing a £93million fee are wide of the mark.
Although Madrid recognises Bale's talent having been impressed by his 31-goal haul last season, Raul thinks a world-record fee for the Welshman is simply too much.
"Bale is a wonderful player and he will be a great addition to Real Madrid, but his price is too high," Raul told the website of his club Al Sadd in Qatar.
"Tottenham overestimates in the price of Bale."
Bale has not played for Tottenham for over a month as he has been struck by two injuries, the first to his buttock, and the most recent one, which will keep him out of Thursday's Europa League game against Dinamo Tbilisi, to his foot.
Spurs midfielder Paulinho, who joined the club from Corinthians for a then club-record fee of £17million, wants Bale to spurn Madrid's interest and stay at White Hart Lane.
"I sincerely don't know (if he will stay), but I think this is something more private for Bale, he doesn't tell me anything," he told Fox Sports Brazil.
"But I hope he continues with us, so that he can help us. He is a great player and achieved great stats last season, so I hope he stays with us."
Despite all the uncertainty surrounding Bale, what is clear is that Tottenham are willing to keep on spending before the transfer window shuts on September 2.
Manager Andre Villas-Boas spoke of his admiration for Anzhi Makhachkala forward Willian at a press conference on Monday and reports today suggest the Brazilian could be close to moving to the London club.
Roma forward Erik Lamela is another player who Villas-Boas appears set on adding to his squad.
Lamela's agent is understood to have cancelled a planned trip to London on Monday, but he still may make the journey later this week to join Roma officials, who are reported to be in the English capital to discuss the potential transfer of the Argentinian.
Villas-Boas has already spent almost £60million on new signings this summer, but he has sold Scott Parker, Tom Huddlestone, Steven Caulker and Clint Dempsey.
Two other players who could leave the club are Benoit Assou-Ekotto and Emmanuel Adebayor.
Assou-Ekotto is attracting interest from Turkey while Adebayor is facing an uncertain future following the arrival of £26million striker Roberto Soldado.
Both Assou-Ekotto and Adebayor will not take part in Thursday's game in Georgia, Villas-Boas confirmed on Monday.