James McCarthy
James McCarthy impressed with Wigan last season and has been linked with a move away this summer. [Reuters]

Newcastle United have identified Wigan Athletic midfielder James McCarthy as a possible replacement for Yohan Cabaye who appears on the verge of joining Arsenal.

The Gunners have had one bid turned down for the France international but it is expected that they will return with an improved offer after Toon boss Alan Pardew admitted that the club would sell for big money.

"The bottom line is with world-class players if they move on, it has to be world-class money," said Pardew after being asked whether he would consider allowing Cabaye to leave.

Should Arsenal return with a significantly improved offer then it is likely that Newcastle would look to sell, especially with Cabaye refusing to play for the club after he heard an initial offer was rejected.

Now the Mirror is reporting that Pardew has a replacement in mind and is hoping that he will be able to persuade McCarthy to leave Wigan for an immediate return to the Premier League.

The Republic of Ireland international has been heavily linked with a move to Everton where he would be reunited with former Wigan boss Roberto Martinez, but the Spaniard has denied making an offer for the midfielder.

"There has been no bid made. I think it's quite easy to understand that James is a player I signed at a young age," Martinez told the Mirror. "I have got huge admiration for him, so it doesn't take anyone much to create a little bit of a story.

"But while the window is open, you always need to be actively looking around to see if you can get anyone to help the squad."

The Mirror believe that Newcastle would have to bid in the region of £15m to land McCarthy, but any possible offer is only likely to come once they have sold Cabaye and have the available funds.

Arsenal's first offer of £10.2m was immediately rejected but the north London club are said to still be in discussions with Newcastle as they attempt to persuade them to part with the wantaway midfielder.