La Gazzetta dello Sport splashed the story across their front page this morning.
The Rossoneri are still inclined to turn down the proposal, as El Shaarawy is only 20 years old and already one of their top scorers this season.
However, if Tevez were to be included in the deal along with £21.2m, then Milan may well give it some serious thought.
The Little Pharaoh is part of the senior Italy squad going to the Confederations Cup and is a lifelong Milan supporter.
He had also been linked with Arsenal this summer, but Manchester City appear to be making El Shaarawy their top transfer target.
According to La Gazzetta dello Sport, Tevez would also be prepared to halve his wage demands from €8m per season to €4m.
Tevez had already been close to a Milan move last year and again in January before they snapped up Mario Balotelli instead.