I'm not sure it would make sense if we were 'looking to sell' Varela. I know there was talk about him being unsettled, but he was amongst the most promising of our reserves, and I remember him being name-checked by Phil Neville about his future prospects. He also cost £2.5m, and had pedigree.
I think his loan was agreed as part of the Di Maria deal, but if Madrid don't wish to pursue, especially as they have just bought a very expensive RB, I don't see why he can't return here. If he does come back, he'd either be in the first-team squad, or go on loan again - as he has probably outgrown the 21s.