Southampton legend Claus Lundekvan believes that Theo Walcott will extend his contract with Arsenal.

The England international left the Saints to join the Gunners in January 2006, and remained in contact with then-captain Lundekvan ever since.

Walcott's current deal with the North London outfit expires in the summer, but the Norwegian is adamant that the 23-year-old wants to stay at the Emirates Stadium.

"The feeling I got is that he wants to 'serve' Arsenal. It is natural that other big clubs are sniffing around him, but I got the impression that it was not very serious for his part," Lundekvan told Dagbladet. "Now he has been given the chance as a striker. What has made things take so long is simply the financial requirement he has. I think that's where the disagreement is.

"It is well talked about that he wants around £100,000. I reckon the contract situation will be resolved just after New Year. I think and hope that he signs a new contract. Theo fits well in the club. When he left us, it was Arsenal he wanted to go to.

"He has always admired the way they played football. I hope he stays true to Arsenal, who have been loyal to him and given him chances. He's loved in Arsenal. I've spoken to his father as well and I know he enjoys himself."

Walcott returns to his former club when Arsenal face Southampton at St Mary's on New Year's Day.