Manchester United and Arsenal will face a massive transfer blow this summer as Borussia Dortmund star Ilkay Gundogan is already in negotiations with Barcelona and Real Madrid to move to La Liga, according to reports in Spain.

Arsene Wenger has been monitoring Gundogan since last season and Arsenal are keen to make an approach for him in the next summer market to pair him with his compatriot Mesut Ozil.

In the same way, David Moyes wants him as he is desperately looking for a midfielder after United failed to signed Cesc Fabregas and Ander Herrera last summer.

However, Spanish online newspaper El Confidencial claims that Gundogan's father was recently in Barcelona to meet with a Barcelona representative as the Catalonian team are looking for a replacement to Xavi Hernandez, who is already 33 year old.

Some weeks ago El Confindecial also reported that the German midfielder had already told Real Madrid that he was willing to sign for Carlo Ancelotti's side and move to La Liga.The Spanish giant see Gundogan as the ideal successor for Xabi Alonso, who finishes his contract at the Bernabeu at the end of the season and has not decided yet to extend it.

Acording to the report, Gundogan's agents has already met twice with Real Madrid representatives but Barcelona believes that the deal is not done and they are set to make a better bid to beat los Blancos to the signing.

Gundogan's contract with Borussia Dortmund expires in June 2015 and Spanish reports suggest that the German club will consider selling him for around £25m.