Manchester United legend Gary Neville has questioned Manchester City's decision to walk away from a deal to sign Arsenal star Alexis Sanchez.

Widespread reports have claimed that the Premier League leaders have ended interest in the Chile international due to financial reasons.

The North-West outfit are believed to be unwilling to pay more than £20m for the attacker, who will be free to leave Arsenal for nothing at the end of the season when his contract expires.

Manchester United are now favourites to strike a deal, which could make Sanchez the highest-paid player at Old Trafford on £400,000 per week.

While discussing the current situation on Sky Sports' Monday Night Football show, Neville said: "I'm just looking at it economically. Manchester United have apparently offered £35m, £5m for an agent fee and £350,000 a week which comes in at just over £100m for Alexis Sanchez, who is 29 years old.

"City are apparently saying they won't pay more than £72m. Gone are the days where you can think a Bosman signing is going to cost you less than it would do if you were paying a fee to a club.

"If Sanchez had two years left on his contract you'd have to pay Arsenal £75m to £80m and him £200,000 to £250,000 a week. It would cost you £100m. He's going to cost £100m anyway so I'm not quite sure what City's economics are, particularly when they've spent £50m on Kyle Walker and the package of his wages over five years might cost £80m."

Meanwhile, rumours are rife that Chelsea have now entered the race for the former Barcelona star.