Bates proposed the groundshare as part of a deal which would have seen Fulham counterpart Mohamed Al Fayed buy into Chelsea Village plc.
The pair, who are good friends, discussed the 9.9% purchase - the highest proportion Premier League rules will allow - and permanent share of Stamford Bridge a fortnight ago at lunch at Harrods, in the presence of a lawyer.
The proposed £15million scheme would have included Fulham taking out a 25-year lease to play at Chelsea's home, where they would have their own changing area, boardroom and commercial facilities. In return Fulham would pay Chelsea 5% of their turnover minus sponsorship income.
A Fulham spokesman told the Evening Standard: "The chairman wrote to Bates declining the offer. Fayed saw the conversation as a speculative exchange of ideas and was surprised to receive a formal proposal from the Chelsea lawyer the following day.
"He is publicly committed to redeveloping Craven Cottage, or at least building a modern stadium somewhere in the borough of Hammersmith and Fulham."