The Foxes have offered Davids a deal that would see him return to competitive football after being without a club for over a year.
However, the player is stalling on his decision, suggesting the veteran is waiting for a better offer from elsewhere.
Talking about the drawn out deal, Mandaric said: 'It is still touch and go and it is in his hands.
'I am a bit concerned the offer has been sitting there for four or five days and that Davids is not being prompt in making a decision.'
Mandaric has confirmed that he has set a deadline for the deal to come to a conclusion, either way, adding: 'We won't let this drag on past the next couple of days.'