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Luiz is granted work permit despite row with Benfica over £25.6m fee

Chelsea's application for a work permit for defender David Luiz was granted yesterday, even though sources in Portugal were claiming the £25.6m transfer has hit a problem.

Benfica are threatening to pull out of the deal, claiming that Chelsea have reneged on agreements concerning how much money will be paid up front and how much in installments. They included the 23-year-old centre-half in the Benfica squad for last night's Portuguese Cup tie at Rio Ave. Chelsea sources however were describing negotiations as "on-going".

The transfer is a complex deal, with Chelsea midfielder Nemanja Matic, who is currently on loan at Vitesse Arnhem, moving to Benfica as a makeweight worth £4.3m. Benfica will receive around £21.3m in transfer fee, and want a large chunk paid up front. Luiz's ownership is shared between the football club and an investment group called Benfica Stars Fund, who will be owed £6.4m from the sale of Luiz which the club must repay once the deal is completed. A further £650,000 will go to his former clubs in Brazil.

The Chelsea manager, Carlo Ancelotti, yesterday attended the work permit hearing at the Premier League's headquarters in central London, along with Chelsea club secretary David Barnard. They said there were a few finishing touches to be put on the deal but clearly anticipated it would be closed imminently. The permit for Luiz was duly granted.

Chelsea also sent two players out on loan yesterday. Teenage midfielder Gaël Kakuta has joined neighbours Fulham until the end of the season and could make his debut in next Wednesday's league game with Newcastle at Craven Cottage.

France Under-20 player Kakuta was widely regarded as one of the brightest prospects in the game when he joined Chelsea from Lens in 2007. He has made 16 appearances for the champions but only five starts and was an unused substitute in Monday night's 4-0 win at Bolton Wanderers.

Chelsea have also agreed a deal which will see 20-year-old Dutch left-back Patrick van Aanholt move to Leicester City on loan until the end of the season, subject to Football League approval. The 20-year-old Dutch Under-21 international, who joined the Londoners from PSV Eindhoven in 2007, will go straight into Leicester's squad for their game at Sheffield United on Tuesday.