Arsenal chairman Peter Hill-Wood has revealed that winger Theo Walcott has turned down a new contract at the club but the businessman expects the England international to stay.

The 23-year-old has so far avoided putting pen to paper on a new deal at the Emirates, despite publicly claiming that he wants to stay with the North London outfit and play in a more forward role under manager Arsene Wenger.

Reports have claimed that Walcott is angling for a bigger pay packet but Hill-Wood has insisted that Arsenal will not break the bank to keep hold of the winger.

"We have got our general overall wage structure and we are not prepared to break it for anybody," the Daily Star quotes Hill-Wood as saying. "We have made an offer which he didn't think was acceptable and that is the end of it. We think it is a very reasonable offer.

"For the moment his people are still talking to us and we hope it will be resolved. But don't ask me when, because I haven't a clue."

Wenger recently claimed that he expects Walcott to agree a new deal.