Arsenal's Alexis Sanchez in action against Chelsea in a Premier League match. Photo: John Walton/PA

Manchester City have cleared the way for Alexis Sanchez to join their Old Trafford neighbours by refusing to pay out £40million for the Arsenal star.

Manchester United manager Jose Mourinho responded on Friday by labelling Sanchez ‘phenomenal’ and admitted some players are worth buying in the January transfer window.

City remain favourites to land Sanchez, but sources close to the Chile forward indicated last night he could be tempted to turn his back on the Etihad and head for Old Trafford instead if United’s financial package is lucrative enough.

They are ready to better City’s personal terms of £250,000 a week for the 29-year-old, who was demanding £400,000 a week to stay at Arsenal before refusing to sign a new deal.

Arsenal want a £35m transfer fee but City will not offer more than £20m for a player who will be a free agent in the summer. It is understood that Sanchez’s agent Fernando Felicevich is also due a fee of around £5m from any deal.

United are prepared to offer closer to Arsenal’s asking price and are willing to include Henrikh Mkhitaryan as part of the deal, but neither of the Manchester clubs are believed to have tabled a formal bid yet.

Sanchez is desperate to leave the Emirates this month and has told team-mates he expects to go. He is known to want to work under his former Barcelona coach Pep Guardiola and be part of the City project, but United’s intervention has put their rivals under pressure to make a move now.

Aware of the high costs involved, Guardiola is not desperate to sign Sanchez this month and may gamble by waiting until deadline day or even the summer.

City have also been encouraged by the latest update on Gabriel Jesus following the Brazilian’s visit to Barcelona to have his knee ligament injury assessed by Dr Ramon Cugat on Thursday.

Guardiola confirmed that Jesus could be back within two or three weeks, lessening the need to sign a replacement this month.

Mourinho reacted to the latest twist in the Sanchez saga yesterday by praising the player and admitting United could be persuaded to alter their policy of not buying in January.

He said: ‘In relation to Alexis Sanchez, I don’t say a word. The only word I can say is he is a phenomenal player. Apart from that, he is an Arsenal player and I feel I shouldn’t say much more than this. Probably this weekend he is going to defend Arsenal colours, so I don’t think it’s correct to say things about Alexis Sanchez.

‘At the general level, what I can say is myself and the Manchester United board and owners, we don’t believe a lot in the January market. We don’t believe in signing a player just to do something. What we believe really is there are some players in the football world if you have the chance to sign them in January, March or July, you have to try and that’s it.’

It is understood that Wenger will not allow his feud with Mourinho to scupper Arsenal’s hopes of securing the best price possible for Sanchez.

The two men have a history of bust-ups which has cast some doubt over Wenger allowing the club’s best player to team up with his arch enemy.

But the Frenchman is ready to sanction Sanchez’s move to Old Trafford provided United offer more than City. However, Wenger warned United and City that Arsenal will not allow Sanchez to leave this month until they have a replacement lined up.

Bordeaux attacker Malcom is the man Wenger wants and the Gunners are growing increasingly confident of landing the 20-year-old in a £40m deal.

‘We didn’t sell Sanchez in the summer because we couldn’t find a replacement and that’s the case now,’ Wenger said yesterday.

Wenger is set to include the Chilean in his squad for tomorrow’s trip to Bournemouth after accepting that axing him would damage Arsenal’s bargaining power.

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