The Hibs manager revealed the Edinburgh club had agreed terms with the 32-year-old only for the player and his representatives to attempt to renegotiate the deal.
Lennon had made it clear he was keen to sign both McDonald and Grant Holt to add further firepower and experience to his squad as they bid to win promotion in the coming season having worked with the players at Celtic and Nottingham Forest respectively.
Admitting earlier this week that “nothing is done yet”, Lennon revealed that in relation to McDonald, who also played for Middlesbrough and Millwall, Hibs were “well down the line in talks, but not over the line just yet”.
However, Lennon seemed optimistic, adding: “The fact that they [McDonald and Holt] are making waves to come here speaks volumes for their attitude. I’m sure they could get more money elsewhere, but they are thinking about here for footbaLl reasons, and for a manager that’s great.”
But while 35-year-old Holt committed to a one-year contract the following day, it emerged McDonald appeared to be having second thoughts, those reports proving to be accurate with the player opting to extend his second spell at Fir Park where, it was said, he had been offered a pay cut if he stayed.
Agreeing to another year with the Lanarkshire outfit, McDonald told Motherwell’s official website: “I am so happy to be back at the club and can’t wait to get started again. There were a couple of serious offers on the table for me, but I always had it in my mind that Motherwell was a club where I love being, playing with the players and a manager who I respect and supporters who have been very good to me.
The Australian later added: “To clarify everything, there was an offer that was there from last season and it was still there over the summer.
“A couple of other opportunities arose, we spoke and looked at them, but as it was I wanted to come back.
As far as Hibs were concerned, he said: “It was a possibility but I don’t think it was ever there. I didn’t speak with a chief executive or a manager for a couple of weeks.
“I spoke to Neil [Lennon] a couple weeks ago, but in terms of being down the line I spoke to their head of recruitment, and that’s as far as it got.
“Hibs knew what I was offered here [at Motherwell] so we never really got to a ballpark [figure]. It’s a great club and something that I was interested in, but I had time to reflect and I wanted to come back here.”
However, McDonald’s version of events clearly irked Lennon who said: “I was surprised at the suggestion that Scott turned down an offer from Hibernian.
“We were interested in taking the player to Easter Road.
“We reached a point where terms had been agreed, but Scott and his representatives came back to renegotiate and we decided to withdraw the offer.
“The board and I will not be messed around with in negotiations, and we will now pursue other targets.”