Falcao, who scored 38 goals last season as Porto won an eye-catching treble, was reportedly a target for new Blues boss Andre-Villas Boas, who himself made the switch from the Estadio do Dragao this summer.
A release clause of 30million euros had been in place - a figure that has now been raised to 45million euros, or nearly £40million.
The Colombian striker, who had also been linked with Atletico Madrid, is now contracted to the club until the end of the 2015 season.
Source: Mirror Football
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