Arsenal are not willing to sanction the sale of Alexis Sanchez until they land a replacement, and have targeted a deadline day move for Paris Saint-Germain midfielder Julian Draxler.
Manchester City are keen on signing the Chile international and are said to be preparing an improved offer on the final day of the transfer window after their first bid of £50m was rejected by the Gunners.
Arsenal are said to want at lease £70m to part with the attacker, who has less than a year remaining on his current contract, but are aware that they will have to sign a top-quality replacement to appease the fans.
Manager Arsene Wenger has maintained throughout the summer that Sanchez will not be allowed to leave despite the risk of losing him on a free transfer next summer, but City's insistence could pave the way for a move.
Recent reports suggested that Pep Guardiola's team were ready to offer a player-plus-cash deal involving Raheem Sterling but that was dismissed as both clubs are keen on a cash-only deal.
According to the Mirror, Wenger has made Draxler his priority target in the event that Sanchez is allowed to leave and will make a move to bring the German midfielder to the Emirates.
Apart from him, the Gunners are also said to have revived their interest in AS Monaco's Thomas Lemar while Leicester City's Riyad Mahrez also remains a back-up option.
PSG could allow Draxler to leave this summer despite only signing him from Wolfsburg during the this year's January transfer window as they look to balance their books following the arrival of Neymar in a world-record €222m (£198m).
They are also favourites to sign Kylian Mbappe on loan from Monaco with an option to buy him next summer for another hefty fee reported to be around £167m.
Apart from the need to balance their books, the Germany international is also surplus to requirements as the aforementioned duo play in the same left-wing position he occupies.
Draxler has managed just 12 minutes in the two games he has been involved in this season, which could prompt him to find pastures new in order to play regular football.
Arsenal were heavily linked with a move for Lemar earlier in the transfer window and had a number of bids rejected before Wenger declared the move 'dead' owing to AS Monaco's reluctance to sell.
However, Liverpool are linked with a move for the Frenchman today (31 August), while Barcelona have also earmarked the Frenchman as a back-up if they fail in their move for Liverpool's Philippe Coutinho.
Mahrez, on the other hand, looks certain to leave Leicester City after the Algerian Football Federation confirmed that the midfielder has been given permission to skip training and travel to Europe to complete a deadline day move.
Arsenal have competed just two signings thus far – Alexandre Lacazette and Sead Kolasinac – and are one of only five clubs in the Premier League earning a profit this summer, if we include the £40m fee the Gunners agreed with Liverpool for the sale of Alex Oxlade-Chamberlain.