O'Neill plans to speak to Sturridge, who was transfer-listed by County and pulled out of his side's game at Everton on Saturday. The player has also been linked with Sheffield Wednesday and Nottingham Forest, but Leicester have now moved ahead in the race for his signature.
O'Neill has had money to spend for some time but has had trouble finding the right players. Sturridge's availability has alerted him, although the player is reputed to be on a high salary at Derby and personal terms could yet be a stumbling block.
Liverpool are hoping it will be third time lucky when they turn their search for a goalkeeper to Real Madrid's German international, Bodo Illgner.
Gerard Houllier, the Liverpool manager, has been in contact with the 31-year-old's agent about a move to Merseyside and has high hopes of success in attracting Illgner, who has played for Real in the Champions' League this season. His future in Spain was plunged into doubt by Real's acquisition of Argentina's Under-21 keeper, Albano Bizzarri.
Liverpool, whose No 1, David James, will be out of contract in 18 months' time, failed to lure Illgner's compatriots Jens Lehmann, who joined Borussia Dortmund, and Stefan Klos, who has signed for Rangers.
Antti Niemi, the Finn who has lost his place to Klos at Ibrox, has attracted the attention of Sheffield Wednesday.
Nottingham Forest have made a bid for Bolton's top-scorer, Arnar Gunnlaugsson. Forest's manager, Dave Bassett, is keen to add the scorer of 14 goals this season to his shot-shy attack. The Icelander is valued by Bolton at pounds 5m.
Blackburn Rovers are anxiously awaiting fitness reports on Chris Sutton amid fears that the striker may have damaged knee ligaments. Sutton was carried off during the victory over against Aston Villa on Saturday after a tackle from Ugo Ehiogu. Doctors will inspect the problem this week.
If Sutton is ruled out for a long spell, Blackburn will be under pressure to agree terms with Barnsley's Ashley Ward. The clubs have already sorted out a pounds 4.5m fee.
John McGrath, a rugged centre-half, colourful manager and after-dinner speaker, collapsed and died at his home of a suspected heart attack on Christmas Day. He was 60.
As a player, McGrath served Bury, Southampton, Newcastle United and Brighton. He entered management with Port Vale 19 years ago, appointing John Rudge as his deputy, and later took charge of Chester, Preston and Halifax.Reuse content