The Ibrox side received permission to talk to the Nigeria defender after having a bid thought to be £1.5million accepted by the Coca-Cola Championship side.

However, Shittu has rejected the club's contract offer despite initially expressing a willingness to move north.

Smith told Rangers World: "There have been negotiations going on between the club and the player for quite a period of time and we have not managed to reach an agreement, so it looks as if that one is finished."

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After failing to seal the deal, Smith had more concerns when DaMarcus Beasley and Charlie Adam limped off during a 1-0 friendly win at German fourth division side Preussen Munster.

Adam, who scored a penalty, suffered a minor ankle injury but Smith was more concerned about American Beasley's hamstring problem.

Smith said: "DaMarcus looks as though he has a bit of hamstring trouble and we're disappointed that has happened.

"Charlie also went over his ankle but he is okay and that should clear up without too many problems."

New signing Kyle Lafferty and last season's star man Carlos Cuellar sat out the game through injury but Smith hopes to have them back during their three-game spell in Germany.

"Kyle hurt his back in training this morning and had spasms so he was left out," Smith added.

"I don't know if he'll be fit for Wednesday's game at Sportfreunde Lotte or not.

"Carlos has a little bit of a calf problem. It is tight but nothing more than that so we are taking precautions with him too.

"If he ends up missing Wednesday's match, I think he will be okay for Saturday's meeting with Schalke."

Smith reserved special praise for Kenny Miller, who hit the post in a lively second debut for Rangers following his £2million switch from Derby, a transfer which has proved unpopular with many fans.

The Rangers boss said: "It's really about the performance at this stage, although you always want to win the game as well.

"The first half was fairly even but we had the majority of possession in the second and created a number of opportunities that we never took.

"With that said, Kenny did well for the team and had two or three really good chances that he might have converted.

"He hit the post just after the break and, all in all, played very well in his first outing for the side.

"We are happy enough with the outcome of the game and although we picked up one or two injuries, I would hope they're not serious."