If Mike D’Antoni is using the Knicks as leverage to get a better deal from the Bulls, those around him are constructing an impressive mirage.

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Sources in both Phoenix and on the East Coast told the Tribune that the expected face-to-face meeting between D’Antoni’s agent, Warren LeGarie, and Knicks president Donnie Walsh didn’t come off Thursday. But there were some telephone discussions, in which mutual interest was made clear enough to take talks to the next level.

There is no deadline, but there remain indications in Phoenix, Chicago and New York that things will heat up over the weekend, and D’Antoni should have one or more offers to consider as he decides on his next coaching destination.

Several sources quickly dismissed a suggestion by ESPN’s Stephen A. Smith that the negotiations with the Knicks and Bulls could be a ploy designed to strengthen D’Antoni’s position in Phoenix and set up a return to the Suns.

In the D’Antoni Derby, the Knicks have the obvious financial advantage. Not only does ownership have deeper pockets, but it has shown a track record of not being afraid to spend. A reported six-year deal in the $30 million neighborhood must be taken seriously.

They also have a newly-minted, veteran hand running the ship in Walsh who can guarantee that the organization will stay the course through what could be a painful rebuilding phase. Walsh tried hard to lure D’Antoni to Indiana as an assistant in 2000 and appeared well on his way to hiring Mark Jackson before D’Antoni unexpectedly surfaced.

But beyond that, D’Antoni would be taking a huge leap of faith in Metropolis.

He has to hope Walsh and the yet-to-be-named new Knicks GM could clear the decks of the players and big salaries that won’t fit his system (Eddy Curry, Stephon Marbury and Zach Randolph) and piece together a workable nucleus.

The good news? D’Antoni has proven he needs — and prefers — only seven or eight warm bodies to make it work.

The Bulls, meanwhile, have a much more workable roster, one filled with athletic and intriguing pieces for D’Antoni. Sources say GM John Paxson was very impressed with what he heard in two face-to-face meetings and the Bulls might be ready to ease off their “defense-first” mantra to become a legitimate player for the first time since Michael Jordan left for the last time.

But D’Antoni might see a management situation that is too similar to the one he is leaving behind in Phoenix, and that expectations would be high to produce right away while he his immersing the Bulls in his new style.

Finances are also a sticking point. The Bulls were burned by the last long-term coaching deal that saw Scott Skiles fired but still owed $5 million while he coaches in Milwaukee this year.

But Chicago is a big market with an arena that has been sold out for decades and a payroll under the salary cap. If the Bulls want D’Antoni, they can afford him, and if the 2008-09 budget is the problem, a creative, back-loaded contract is an alternative.