City had no hesitation in rejecting the bid as the Royals were offering less than the £500,000 cash that they offered to pay for Murray's services last week.
Bristol City also confirmed that they have rejected another bid from an unnamed Division One club for their most celebrated player.
City chairman Steve Lansdown told bcfc.co.uk: "The cash value of any deal is the most important thing for us and for that reason we have rejected the latest bid from Reading as it is still some way short of our valuation of Scott."
An immensely skillful player, Murray has been cited by Pardew as the perfect man to replace Sammy Igoe who has left the club having not been offered a new deal.
It is not known yet whether Reading will be prepared to make another bid for the 29-year-old who has just a year left on his contract.
The Ashton Gate side are holding out for £1m for their star player who bagged twenty-six goals last season from midfield as they won a Play-Off place. Whilst West Brom, Wigan, Cardiff and Millwall are all reportedly interested it is unlikely that anyone will stump up the cash Bristol City want.
Meanwhile, Lansdown went onto confirm that City are interested in signing Reading's out of contract striker Jamie Cureton. Lansdown admitted he has been talking with Curo's agent about a possible deal with the former Bristol Rovers man.
Yesterday Reading Mad compiled an article on where we think Cureton will be heading, you can read it here.