Real Madrid are reportedly set to slash the asking price for Arsenal and Chelsea target Sami Khedira from £20m to £8m.

According to Spanish newspaper AS, the reigning European champions have hit a deadlock in negotiating a new contract with the German and are therefore willing to offload the player now than risk losing him on free next summer.

Arsene Wenger has been linked with the midfielder all through the summer, but he came out and quashed the rumours when he admitted that the Gunners were not close to signing Khedir

However, ever since that admission, there have been rumours that the north London club are still interested in signing the German international as he was willing to compromise on his hefty wage demands.

Blues boss Jose Mourinho is also a keen admirer of the midfielder and reports claim that he wants to bring his former player to Stamford Bridge, and is even willing to wait till next summer to do that. It is claimed that he has already spoken to Khedira and asked him to snub Arsenal and hold out for a future move to Chelsea.

The 27-year-old midfielder had an impressive 2014 World Cup campaign with Germany, playing a key role in their run to the title, and has been on the radar of the two clubs ever since.

Khedira is said to be looking for a move away from the club, after it was made clear that he is not going to get regular football, after being completely left out of the squad for the UEFA Super Cup game against Sevilla on Tuesday.

However, Arsenal and Chelsea are not the only ones battling for Khedira's signature and the clubs may face stiff competition from Serie A club Fiorentina and Bayern Munich. The Bavarian giants are looking at possible replacements for the injured Javi Martinez, who has been ruled for up to seven months.