Manchester United and Arsenal have received positive news in their pursuit of Borussia Dortmund midfielder Ilkay Gundogan, according to the Daily Star.
The 23-year-old Germany international, who is a key player in Jurgen Klopp's side, has yet to agree a contract extension with the Bundesliga outfit.
His current deal expires in 2015 - and Dortmund CEO Hans-Joachim Watzke, although optimistic, is uncertain whether the player will reach an agreement with the club over a new contract.
"It is our absolute desire that besides Robert Lewandowski no other regular player leaves the club," Watzke told reporters. "Only in the case of Ilkay Gundogan, we do not yet know how it will turn out. We would love to extend (a contract) with him."
Recent reports suggest that Gundogan is closer to moving to Spanish giants Real Madrid, with a potential swap deal involving Nuri Sahin mooted.
However, Gundogan's father promptly dismissed the speculation.
Manchester United, following a poor start to the season, will be keen to strengthen their squad with a quality midfield addition in the January transfer window - and Gundogan could be the solution to their problems.
However, Arsene Wenger is known to be an admirer, and Gundogan might be more tempted to join the Gunners in order to team up with Germany teammate Mesut Ozil.