The 19-year-old has already made an impact for the Arabs this season after making his debut in the away leg of their UEFA Europa League second qualifying round against Slask Wroclaw.
The midfielder, who played three games on loan at Forfar last season, has also been the most impressive player on show for Scotland Under-21s in their two most recent games.
Peter Houston: "It is obviously down to his agent trying to get him more money.
"We offered Scott Allan a deal last week. He has taken it back to speak to his father.
"It could be his agent that is pushing things, but we'll expect an answer from Scott and we'll announce it when he accepts it.
"He is nowhere near ready to go into the Celtic, Rangers or Newcastle first team.
"We've seen him through glandular fever, broken legs and other instances off the park - and we're getting some rumour monger starting a rumour about Scott Allan.
"It is galling because it is absolute nonsense."