Arsenal have reportedly come to an agreement with Sami Khedira over personal terms ahead of a proposed January transfer, but they've still not met Real Madrid's £10 million asking price for the contract rebel and that means AC Milan still have a chance of hijacking the much-rumoured deal.
Khedira nearly joined Arsenal in the summer but the Gunners refused to meet the World Cup winner's lofty £150,000-a-week wage demands, while Manchester United are also seriously interested and had a £31m offer for the midfield maestro turned down just over 12 months ago.
Real Madrid boss Carlo Ancelotti is desperate to block Khedira moving to the Premier League though, a stance which Tuttosport believes has alerted Milan to the possibility of signing a proven world-class star on the cheap.
Milan join the race
AC Milan can no longer compete with Europe's richest clubs for top players in terms of hefty transfer fees, but they believe Khedira is an affordable, attainable target than can be sold the idea of being the Rossoneri's new talisman.
Indecision from Arsenal has helped strengthen that stance, with Filipo Inzaghi adding Khedira to a January transfer shortlist which also includes Benfica midfielder Eduardo Salvio.
Milan want to hold talks with Khedira's representatives to find out if he'd seriously consider a January switch to Serie A, particularly if Premier League interest from Arsenal, Chelsea and United wanes.
Salary demands could be a major sticking point, but Milan managed to work out an agreement to sign Fernando Torres last summer and will be confident of doing the same for Khedira if they become his only genuine alternative to life at Madrid.
Ancelotti fighting a losing battle
It's something of a surprise that Khedira remains in the Spanish capital for the time being, with Madrid selling Xabi Alonso to make room for the 27-year-old despite a total breakdown in contract talks.
Khedira's current deal with Los Blancos expires next summer and there's been no sign of an agreement over fresh terms despite lengthy negotiations, with the German international determined to chase a fresh challenge at the earliest possible opportunity.
The Premier League and in particular Arsenal or Chelsea is where Khedira sees his long-term future, but Madrid are determined not to let a proven world-class commodity leave for free next summer and are ready to sell to the highest bidder in January as a result.
Milan are ready to join that auction and are now confident that if Gunners boss Arsene Wenge fails they could pull off a serious transfer coup that would leave Arsenal fans furious.