Walcott set for Arsenal despite huge Chelsea bid

A three-way race for Theo Walcott's signature was under way between a trio of the Premiership's biggest clubs last night after Southampton confirmed that they had received two firm offers for the 16-year-old prodigy - understood to be a £12m bid from Arsenal and a larger offer from Chelsea - and added that they were anticipating a third bid, believed to be from Tottenham, Manchester United or Liverpool.

Yet despite the frantic manoeuvrings, the race is already over. Walcott has made up his mind that he wants to move to Arsenal. Southampton will have to agree to that move or risk losing him to Highbury anyway for a few hundred thousand pounds.

The teenager has a pre-contract agreement with Southampton to sign professional terms at St Mary's on his 17th birthday in March. But if Southampton reject the bid from Arsenal - where Walcott feels he will receive the best education possible under Arsène Wenger and alongside Thierry Henry - Walcott could dig in his heels and go to a tribunal.

Inevitably, it would rule he was free to move to Highbury, and Southampton could end up with less than £1m, which means that Southampton's chairman, Rupert Lowe has to either sell Walcott to his chosen club, at their price, or lose his brightest young asset for a pittance. "We have received a couple of offers and the indications are another may follow," Lowe said. "These have not been accepted or rejected."

Chelsea have remained silent on bid speculation but are understood to be frustrated that no matter how much money they might offer, they apparently have no chance of signing Walcott.

There are several sticking points in Southampton accepting Arsenal's offer, not least a debate about how much money Arsenal will pay up front [about £5m] and how much will follow in performance-related payments (about £7m under the current offer). There is also an issue over whether Walcott remains at Southampton, on loan, for the rest of the season. Arsenal are not keen.

Lowe must ponder the risks in delaying an acceptance against the possible benefits of waiting for a bidding war to ratchet up the price. Unfortunately for him, Arsenal know the player wants to move to them, and that Walcott's sporting ambitions rather than Chelsea's ability to pay huge wages are more important to the player.

If and when an Arsenal bid is accepted, it is understood that Walcott's agent, Colin Gordon, might technically act for Arsenal in the deal. This is routine practice, and contravenes no regulations. Arsenal had a similar arrangement when they signed Jose Antonio Reyes in 2004, paying his agent on the understanding that the agent was not also paid anything at all by his client for the deal. This practice is beneficial for tax reasons, and is part of Arsenal's policy to ensure the long-term stability of players at the club. Arsenal would not confirm or deny any such arrangement last night. Gordon is seeking the move his client wants, regardless of how much either of them might earn from a move.

Southampton's manager, George Burley, said Walcott's best interests would be better served by staying put. "He is in the best place and doing tremendously well. He is playing regularly which is fantastic at his age." No doubt Walcott will think it more fantastic still when he is an Arsenal player, very soon.