Delph, 18, has attracted the interest of the Premier League club after starring for Leeds and breaking into the England Under-19 squad this season.
Following their slump to League One and well-publicised money troubles, Leeds have been forced to fill their first-team with players who have come through their youtg academy.
"I'm still amazed at a recent offer Newcastle made for Fabian. I won't tell you the content of the fax we sent back but it did end the conversation," Bates told Yorkshire Radio.
"It's inevitable if the team does well, predatory upper league clubs will try their luck without success.
"Fabian Delph will be moving to Premier League, but we hope he'll be moving with us via the Championship. He signed a four-year contract until 2012 and he doesn't want to go anywhere."