Dannii Minogue has snubbed a £1 million offer to return to The X Factor.

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The Australian singer was the lead contender to replace Kelly Rowland – who appeared for just one series last year – on the panel of the show, but negotiations have broken down over how much money she would receive and she continues to be upset about revelations she had a relationship with the programme’s boss Simon Cowell.

A source said: ”It was so upsetting for her to be described as one of Simon’s ‘toys’ and for him to talk about their fling in such a humiliating way.

”Huge sums have been put on the table and it’s not convinced her. It wasn’t about money. She could easily have got more than a million. They desperately wanted her.”

Gary Barlow, Louis Walsh and Tulisa Contostavlos are all returning to the show and are due to start the audition phase next week.

However, an insider claims it was ITV who walked away from the talks to get Dannii back after she wanted five times the amount she was offered.

The source told The Sun: ”We cannot be held to ransom. We are putting contingency plans in place.”

Dannii had previously hinted she would not be returning for the sake of her 10-month-old son Ethan.

She said: ”Ethan has his little routine now. He has swimming lessons. He has things that are more important to him.

”I don’t want to unsettle him to follow me around the globe. The guilt of going back to work floods you. I try to take it all in my stride, but when it affects my loved ones I feel an internal struggle with the love for my work.

”Fame and work have always had an impact on my family since I went into this business at seven. It’s all I know.”