Barkley looked set to join the Blues ahead of Tottenham after they had an offer accepted by Everton.
He came down to London, headed to Surrey then U-turned and is now staying at Goodison Park.
Sky Sports pundit Paul Merson said: “I’m lost for words. You’re going to the champions, he’s going to play with Hazard, Willian, and he’s going to play!
“They haven’t got the biggest squad. I’d like to hear the full story, but I’m shocked.”
A fee of £30million plus add-ons had been agreed for the England international, who is out of contract at Everton at the end of the season.

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Barkley’s hamstring injury was thought to complicate matters as he won’t be fit until November.
Chelsea are now set to sign Danny Drinkwater to further bolster their midfield ranks.
Drinkwater has handed in a transfer request at Leicester and Demarai Gray has also asked to be allowed to move on, with Bournemouth having had a £25m bid rejected yesterday.