Real Madrid are threatening to scupper Arsenal's attempts to sign a new striker this summer - with potential deals to bring Gonzalo Higuain and Luis Suarez to the Emirates veering off course.
The Gunners had been on the verge of signing Higuain last month, but with a £23m transfer appearing a done deal, Real increased their asking price.
The Evening Standard report that Napoli are believed to have now come to an agreement with Real over a fee - £31.8m which could rise by another two and a half million with add-ons.
If the deal for the Argentina international goes through, not only will Arsenal have missed out on one target, but it could lead to them missing out on another.
It's thought Real Madrid will use the money from the sale to help secure a deal for Liverpool striker Suarez.
They had been unwilling to pay £40m — the fee which Liverpool are believed to be prepared to take — but will have more funds to play with.
Arsenal, having had a £30m offer rejected, are expected to return with a higher one shortly. However, Madrid is Suarez’s preferred destination and the Spanish club are under pressure to make a big signing.
Wenger now faces a battle to try and secure the striker he needs. Manchester United insist Wayne Rooney is not for sale and, even if they were to relent, Arsenal would probably lose out to Chelsea, who have already had a bid turned down.