Manchester City are growing worried PSG might have stolen a march on them in the race to sign Alexis Sanchez.

The Arsenal forward has turned down an offer to extend his deal at the Emirates and the Gunners are resigned to lose him for free next summer with the striker will be allowed to speak with foreign clubs from 1 January.

The 28-year-old looked set to be reunited with Pep Guardiola, whom he played under at Barcelona, only for his £60m (€67.6m, $81m) move to collapse on deadline day after Arsenal failed to secure a replacement.

According to the Sun, however, the Ligue 1 giants have stepped up their interest and want Sanchez to partner Neymar and Kylian Mbappe upfront. The player's representatives met PSG executives during the summer when it became apparent Sanchez wanted to leave the Emirates, but not even the Parisians could afford to meet his £400,000-a-week demand.

However, the Chile international was reportedly told PSG were ready to match City's £275,000-a-week offer on top of a hefty sign-on bonus.

"City's pursuit of Alexis could be in trouble," a source is quoted as saying by the Sun.

"Pep is sure he wants to join the club but Paris are sniffing. They still have the funds to sign him and can beat City's wage offer. They will also pay him a huge signing on fee.

"Sanchez can talk to European clubs in January and sign a pre-contract. He's in a very strong situation."

If they are to land Sanchez, PSG will in all likelihood have to part ways with Edinson Cavani, as they have already spent a world record £198m on Neymar and have committed to buy Mbappe for £166m for Monaco next summer, after signing him on a season-long loan.

Cavani, who clashed with Neymar over penalty duties at the weekend, has attracted interest from a number of clubs, including Chelsea and Everton.

Earlier this week, reports suggested Arsenal were prepared to leave Sanchez in if they can sign winger Raheem Sterling in a swap deal.

City have been linked with a £20m move for the striker in the January transfer window but Wenger is reluctant to sell the Chilean halfway through the season, as he feels parting ways with Sanchez would undermine his side's chances of securing a top-four finish.

However, according to the Mirror, Arsenal will test City's resolve in January by launching another bid for Sterling, even though Guardiola has previously claimed he will not listen to offers for the England international.

City are not the only Premier League side in the race for Sanchez, with Manchester United manager Jose Mourinho reportedly eager to throw his club's hat into the ring. The Arsenal striker's camp is understood to have sounded out United after speaking to their cross-town counterparts when it became apparent that Sanchez wanted to leave Arsenal. Mourinho has reportedly been quoted a £25m signing fee for the player.

Sanchez would not, however, be able to sign a pre-contract with the 20-time champions of England as it would contravene the rules. An agreement could still be put in place for the deal to go through when his contract at the Emirates expires next summer, however.