Carrasco was tipped for stardom after a strong end to the 2015/16 season saw him score in the Champions League final and enjoy a fine 2016/17 campaign.
But the 24-year-old has struggled so far in 2017/18, starting just five times in La Liga.
According to AS, Carrasco has had bust ups with Koke and Gabi in the past and manager Diego Simeone is ready to give up and let the club sell him. He would join Luciano Vietto and Nicolas Gaitan in leaving the club in January if a deal can be arranged.
AS notes that Bayern Munich have previously been linked with Carrasco, while The Sun has claimed that Chelsea could resurrect their interest in the player after there was talk of an approach from the reigning Premier League champions in July. The Mirror also link Arsenal with interest in making a potential move.
Tottenham were heavily linked with Carrasco in 2015 before he joined Atletico from Monaco.
Carrasco would add much needed depth to Chelsea's squad ahead of a tough second half of the season that will see the club fighting on four separate fronts.
Having played for Atletico in the Champions League group stage - including twice against Chelsea - he would be ineligible to play in Europe for the remainder of the season.
There is also the drawback of Carrasco not fitting the striker brief that Antonio Conte is said to most want in January, with a lack of depth in the 'number nine' highlighted by Alvaro Morata's recent absence through suspension.