MANCHESTER City look set to lose out in their bid to bring Theo Walcott to Eastlands.
The player looks set to stay at Arsenal after holding showdown talks with Arsene Wenger at the club’s training ground yesterday.
It is understood Walcott did not back down over his contract demands but gave assurances he definitely wanted to stay with the Gunners in the long term.
Arsenal had been braced for the prospect of selling Walcott before the transfer window closes tomorrow but they are now happy to continue negotiations beyond then and effectively risk losing him for nothing next summer.
That is a scenario the club have not been prepared to tolerate in the past, having decided to sell a host of big name players in recent years as they have entered the final year of their contract.
The difference with Walcott is that there is genuine hope an agreement can be reached, although how Arsenal and manager Wenger would react to a big-money bid in the next 48 hours remains to be seen.
Walcott, who has been valued between £12million and £15million, has already been linked with Liverpool this summer.
Reports suggest Barclays Premier League champions Manchester City are also interested in adding the England star to their ever-increasing arsenal of former Gunners after seeing a bid for Swansea’s Scott Sinclair rejected.