Transfer news: Arsenal knocked back in their approach for Real Madrid forward Alvaro Morata

Arsene Wenger is rumoured to regard Morata as the perfect replacement for Watcott - who is out for six months

Morata could be playing at the Emirates this season

Arsenal manager Arsene Wenger has been left disappointed after initially being optimistic about his chances of persuading Real Madrid chiefs to let Alvaro Morata join the Gunners on a short-term loan deal.

The Premier League leaders have been forced into entering the January transfer window after injuries to Olivier Giroud, Nicklas Bendtner and Theo Walcott rendered them alarmingly in need of striking options.

Wenger, wary of overspending this season, preferred to sign Morata on a temporary basis to avoid burdening the club's wage bill with another expensive purchase.

It has since developed, however, that Madrid have no intentions of letting Morata leave the Bernabeu.

According to the Mail, the Frenchman considered the 21-year-old Madrid forward as the perfect 'stop-gap' until the summer despite the Spanish giants telling him there was no deal to be done.

Wenger's preference has always been to wait until the summer to spend big on one of his top strike targets; including Bayern Munich's Mario Mandzukic, Manchester City forward Edin Dzeko and Atletico Madrid striker Diego Costa.

With many of them looking increasingly unrealistic midway through the season, the 64-year-old will do his level best to keep costs down until then.