Former Liverpool defender Jamie Carragher has suggested that Manchester City have pulled out of a deal for Arsenal star Alexis Sanchez based on principle, not money.

Pep Guardiola's side have been favourites to sign the wantaway Chilean for half a year following their failed attempt to get a deal over the line on deadline day in the summer.

Now, though, reports have claimed that the North-West outfit have walked away due to their unwillingness to pay more than £20m for his signature.

The snub has now paved the way for local rivals Manchester United to get a deal done, while Chelsea are also thought to be late entries in the race.

Carragher has suggested that City have given up on Sanchez because he allowed the Red Devils to turn his head with the offer of more wages, thought to be in the region of £350,000-£400,000 per week.

While on Sky Sports' Monday Night Football, the retired centre-back said: "[City and Sanchez have] had a deal, they've shook on a deal and someone's come in at the last minute and offered more money. That's the problem.

"You can't talk about City not offering big money. The figures being bandied about, it's big money. It's all about the player backing out of a deal."

United are reportedly prepared to pay around £35m and offer Henrikh Mkhitaryan in the deal.