England winger Theo Walcott has rejected a new contract with Arsenal and is now likely to be sold this week, according to reports.

The 23-year-old is in his final year of his current deal with the Gunners but talks over extending his time at the Emirates Stadium have broken down over pay issues.

It is thought that Walcott is unhappy with the £75,000 a week being offered by the club, with the player holding out for a figure closer to £100,000 a week.

Arsene Wenger has been trying to fashion a new deal for the former Southampton youngster since February but is now prepared to sell the player after a mixed six years with the club.

Liverpool and Manchester City remain the most interested in the forward, with the Reds reportedly making an enquiry and the Premier League champions asking to be kept in the loop on any developments.

Chelsea were also thought to be interested but are now unlikely to make a move for Walcott after their spending already this transfer window.

Arsenal have already sold Samir Nasri and Robin van Persie over the past two summers under similar circumstances.