Arsenal manager Arsene Wenger backs down over Theo Walcott deal ultimatum

Arsenal manager seeks to smooth over contract row with winger and expects him to stay

Theo Walcott has never said he wants to leave Arsenal (Getty Images)

Theo Walcott was told by the Arsenal manager, Arsène Wenger, yesterday that the club have backed down from their ultimatum that he must sign a new deal before tomorrow's 11pm transfer window deadline or face the prospect of being sold.

The 23-year-old sought the meeting with Wenger having resolved to resist any attempt to move him on over the next 48 hours unless he was convinced it was in own his interests. Walcott has also not signed the new £75,000-a-week deal on offer which means that the player still holds the cards in this stand-off.

Walcott was incredulous at Arsenal's ultimatum, delivered last Friday, given he has never expressed any desire to leave the club despite strong interest this summer from Chelsea, Liverpool and Manchester City, The Independent understands. Walcott could easily have put pressure on Arsenal to sell – especially in the case of Chelsea – given that he has only one year left on his current contract.

It has always been his intention to sign a new deal, although not necessarily before the end of the current transfer window, and relations had previously been smooth between club and player until the last seven days.

The row broke when Walcott and his representative were told to report last Friday to see Dick Law, Wenger's de facto director of football, at the club's training ground. It was at that meeting that Law explained the player either had to sign the contract on offer or face the prospect of being sold before tomorrow's transfer window deadline.

Walcott's was left out of Wenger's starting XI for the 0-0 Premier League draw against Stoke City on Sunday and was still mulling over Arsenal's aggressive new stance when news broke on Tuesday night of the club's position.

With one year left on his contract, and the prospect of being able to leave on a lucrative Bosman deal next summer, Walcott was in no mood to be pushed around by the club. There is an acceptance on his side that negotiations for a new contract might take some time – Arsenal had offered £75,000-a-week, Walcott wanted £100,000-a-week – but Law's ultimatum only served to make Walcott dig his heels in.

The process began with talks planned in January but both club and player agreed to postpone them until the end of the season while Walcott, who was signed from Southampton for £12.5m as a 16-year-old in 2006, addressed a slump in his form during that period.

The European Championship came and went without an offer from the club and it was not until two weeks ago that both sides met for their first serious discussion.Although there was no agreement, relations were cordial at that stage. Walcott's camp were confident that the new contract would be agreed before October.

There had been no discussion – or threats – from Walcott about moving away from Arsenal despite widespread interest in the player, especially from Chelsea, of which Arsenal were well aware.

Walcott also travelled on Arsenal's Asia tour in July, playing and training every day and taking a full role in the club's commercial commitments while Robin van Persie – who was in an identical contractual situation – made it clear he did not wish to be included. Walcott also agreed to travel despite the fact that others who had been involved in Euro 2012 – Per Mertesacker, Lukas Podolski, Laurent Koscielny and Olivier Giroud – were excused the trip.

The north London club are now hopeful that they can reach agreement with Walcott on a new deal over the next few weeks and want to leave the events of the last few days behind them. Wenger will be a crucial figure in smoothing over the relationship between the player and the club.