Real Madrid have reportedly entered discussions with Marco Asensio over improved contract terms including an increased buyout clause.

The 21-year-old scored in the Champions League final victory over Juventus last season and claimed two well-taken goals in the two-legged Supercopa de Espana final against Barcelona this month.

Paris Saint-Germain, Arsenal and Barca are believed to be considering a move for the Spaniard, whose current release clause is thought to stand at around £72m.

The Daily Star claims that Real have opened talks with Asensio's representatives and want to tie the attacker down to a new contract with a buyout clause of around £127m.

However, it is also believed that Los Blancos might still not be able to offer him much first-team football going forward, due to the presence of Cristiano Ronaldo, Gareth Bale and Karim Benzema in the team's frontline.

Asensio, who has won three caps for Spain, joined Real in 2014 from Mallorca and has made 41 appearances for the club so far.