Arsenal have received a setback in their January pursuit of Newcastle midfielder Yohan Cabaye, with the Tyneside club demanding that the Gunners pay in the range of £22m for the player, according to the Daily Mail.

The north London club had put in a £10m bid for Cabaye last summer which was brushed aside by manager Alan Pardew, but the Gunners are looking to try again in January as they target their first league title in over nine years. They will be contested by the cash-rich Paris Saint-Germain who are in the market for a central midfielder and have earmarked Cabaye as their prime target in January.

The involvement of PSG will drive up the price and may make it difficult for Arsene Wenger to land his long-term target. Cabaye has been in great form this season with goals against Manchester United and Crystal Palace in recent weeks and will add another dimension to Arsenal's midfield, which is already among the best in the league. The Frenchman has clearly iterated his desire to play in the Champions League and will look to move out if the opportunity arises. However, the player has ruled out a move in January and insisted that he will remain with the Magpies for the rest of the season.

"I miss the Champions League. I'll finish this season with Newcastle and concentrate on the coming months and then we'll see," Cabaye had said.

Arsenal will face Newcastle at St James' Park on Sunday and Wenger will have an opportunity to scout the player with Pardew looking to settle the scores after what he had described as a derogatory act from the Gunners with the bid.

"What I can confirm, on the eve of a game, is we've had a bid for one of the players which we don't think is acceptable. Therefore I have to pick a team that I think is going to get a result. The rights or wrongs of that bid I will leave others to think about – but I know what I think of it," Pardew retorted.