Capitals defenseman Mike Green has declined the organization’s qualifying offer of $5 million for the 2012-13 season, according to an NHL source.

Green, 26, had until 5 p.m. on Sunday to accept the offer, made last month as required by the NHL for all restricted free agents. The two sides can still negotiate a new deal, however.

Caps general manager George McPhee said little on Saturday about the exact nature of his discussions with Green’s agent, Craig Oster, who also declined comment. McPhee noted that discussions would continue beyond the deadline no matter what and, according to league sources, they have been positive so far. McPhee was including the team’s other restricted free agent, defenseman John Carlson, in his comments.

“I think when you’re sort of negotiating in good faith and trying to get it done. I don’t think anybody’s trying to squeeze anybody on the other side,” McPhee said on Saturday. “And so in some ways [July 15th is] an artificial deadline. I think we’ve had healthy discussions with both players and there are deals to be made there…I think that’s something we’ll get done sooner than later and they’ll be deals that we can live with and they can live with.”     

And so the two sides can continue to progress towards a new agreement. Or if negotiations hit a snag they could table them until after the new collective bargaining agreement is finally hammered out between NHL owners and the NHL Players’ Association. The current CBA expires on Sept. 15 and recent reports on the status of those negotiations aren’t exactly promising if the league is to avoid a lockout.

Green appeared in just 32 games last season thanks to an ankle injury that cost him six and an abdominal/groin injury that eventually led to sports hernia surgery and another 44 missed while on injured reserve. He returned on Feb. 18 and had just one point before the end of the regular season, but did appear in all 14 of the team’s Stanley Cup playoff games.

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