Johnson in Pearce's sights for City move

Johnson, 24, has submitted a transfer request and publicly declared his desire to leave Palace despite the insistence of Simon Jordan, the chairman, that he will not sell the striker. Tottenham Hotspur have been the only team to make an official bid for Johnson, understood to be about £5m, which was turned down.

With Peter Crouch off the market after his move to Liverpool, the City manager Stuart Pearce will pursue Johnson and, failing that, Aston Villa's Darius Vassell with the money he has raised from the sale of Shaun Wright-Phillips. Although City will not receive all of that £21m fee this summer, the board has pledged at least £10m to Pearce for immediate use.

While Jordan has appeared in no mood to change from his position that Johnson is not for sale, the fee that Palace would find hard to resist is in the region of £7m. The proposed bid from the Seville president, Jose Maria del Nido, will be contingent on the Spanish club selling their Brazilian midfielder Julio Baptista, but if Jordan accepted itthe deal would flush out other clubs interested in Johnson like Tottenham. Johnson has four years left to run on his Palace contract and City are aware that any attempt to sign him will not be made easy by Jordan, who has had to sell Wayne Routledge to Tottenham this summer.

Pearce, whose team are in Thailand for the Premier League Asia Cup, yesterday defended his decision to sell Wright-Phillips.

"In the long run, I think this will actually benefit us," he said. "Even if Shaun had stayed, I would still have needed to bring in some players - and the financial situation would have been totally different. As a club, we only need to look along the M62 to see what happened at Everton when they lost Wayne Rooney. They have gone from strength to strength since the day it happened. It is not an awkward situation - Shaun said he wanted to go and Chelsea came in with a bid we felt was right.

"I already have a squad of very good players here. Now I need to add another two or three and try and improve on what we achieved last season."

Owen Hargreaves would consider an offer from Arsenal, but the England international would have to be convinced that he was central to Arsène Wenger's plans after he was told by the Bayern Munich coach Felix Magath that he was now the club's first-choice holding midfielder.

While Bayern's attitude to Hargreaves, 24, has been ambivalent in the past, he has started every pre-season match so far this summer and has been reassured by Magath that he will figure prominently in the Champions' League. It was on that basis that he turned down a move to Middlesbrough, although he has a high regard for the manager Steve McClaren from his time with the national team.

Bayern have also indicated that they will give a new four-year contract to the midfielder Michael Ballack, 28, who - with one year left on his contract - has been cited as a target for Manchester United. The Germany international will be on Bayern's pre-season tour to Japan at the same time that United are in the country but is understood to have begun negotiating a new deal that will keep him at the club until 2010.

United have signed the goalkeeper Ben Foster, 22, from Stoke City for an initial fee of £1m that could rise to £3m with appearances.