The Blues manager Steve Bruce made an enquiry last week to the Spanish giants regarding Larsson and was initially given some encouragement. But Barça had a change of heart and Larsson decided to pledge his future to the club for the rest of the season, although he confirmed last night that he would leave at the end of the season.
Bruce then turned his attention to Sutton and the 32-year-old has signed a contract which will keep him at St Andrews until the end of the season. The Birmingham City owners David and Ralph Gold and David Sullivan will fund the deal using their own finances.
Sutton said last night: "I had five great years at Celtic under Martin O'Neill. I would like to thank the players and staff at Celtic for making me and my family so welcome. I would also like to thank the Celtic fans for their tremendous support. It has been very disappointing for me to leave Celtic but ... I'm looking forward to getting started for Birmingham City."
Everton, Fulham and Blackburn were also interested in Sutton, who scored 63 goals in 127 matches for the Hoops, whose manager Gordon Strachan expressed his disappointment at losing the player.
He told the club's website: "It is obviously a huge disappointment to lose a player of Chris' quality. The club has granted Chris his wish to move on and I would like to wish him all the best for the future."
Bruce is also showing an interest in the Polish striker Grzegorz Piechna, who has just made his debut for his country. Peichna has scored 16 goals in 17 games for Korona Kielce during the current campaign.
Bruce is hoping to take the player, valued at around £700,000, on trial during the mid-winter break in Poland.Reuse content