Paris Saint-Germain are in talks with Monaco over a £128m ($165m) deal to sign teenage striker Kylian Mbappe, according to reports.

Sky Sports says PSG are hoping to take Mbappe on a season-long loan with an agreement to make the transfer permanent next summer in order to avoid falling foul of Uefa financial fair play regulations.

The deal could also involve PSG's Brazilian forward Lucas Moura moving in the opposite direction to Monaco, with talks between the two clubs reported to be at an early stage.

PSG broke the world transfer record earlier this month when they signed Neymar from Barcelona for £198m.

The Parisian giants have emerged as the favourites to land Mbappe ahead of the likes of Barcelona, Manchester City and Real Madrid, with the 18-year-old reportedly in favour of moving to the French capital.

Mbappe was named the Ligue 1 Young Player of the Year after scoring 15 goals in Monaco's title-winning 2016/17 campaign.

The France international has said he would only play for a club that offered regular first-team football to boost his chances of playing in the 2018 World Cup in Russia.

Kylian Mbappe
Monaco forward Kylian Mbappe, 18, is one of the most coveted young players in Europe Reuters

However, PSG's pursuit of Mbappe has attracted criticism from Lyon president Jean-Michel Aulas, who said the move could end up harming competition in Ligue 1.

"If you no longer have an equilibrium in terms of investors, eventually you risk not having this great football as seen with PSG," he was reported as saying by ESPN.

"I'm afraid that we get into a bicep surge, which is not useful. Will it improve the performance of PSG as Mbappe comes?

"If you stack, with supernatural money, the best players in a team, you do not have any more competition," Aulas added.

PSG thrashed Toulouse 6-2 at the Parc des Princes on 20 August to extend their perfect start to the season, with Neymar scoring twice on his home debut.