United to offer instalment deal to lure Gremio's Costa

Manchester United are attempting to bridge a substantial divide with the Brazilian club Gremio to bring 18-year-old Douglas Costa to Old Trafford, having failed to secure his services through a loan deal.

Gremio value the left-side attacking midfielder at £21m, a sum United are not willing to pay for an individual who, despite his sparkling performances in the South America Under-21 championship, has played only 12 times for the Porto Alegre-based club.

But Sir Alex Ferguson, acting on groundwork by John Calvert-Toulmin, United's principal scout in Brazil, is urging the club to renew efforts to sign the player. United are hoping Gremio – whose president, Duda Kroeff, has told the Premier League champions to make a straight cash bid or forget a deal – will be prepared to consider an offer of £7m with substantially more to follow in a deal structured around performances and success.

Gremio are experiencing financial difficulties and those leading the negotiations are expected to argue that this offer is as good as it will get.

Ferguson's convictions about Costa are firm – he is understood not to have sought to bring the player to Manchester on a trial, with the loan option his initial preference – and it remains to be seen whether Kroeff will be persuaded to consider a figure substantially less than the £21m release clause in the contract which ties Costa to Gremio for a further four years. Costa is a free-kick specialist resonant of Cristiano Ronaldo and his close control has produced goals which the departed Portuguese would have cherished.

Ferguson, who will present his summer signings Michael Owen and Antonio Valencia today, may provide a sense of whether he feels he has done enough to prepare United for life without Ronaldo and Carlos Tevez, but there is no feeling from United that he is ready to splash out on this kind of £20m-plus target to fill the gap.

Josep Maria Mesalles, the agent for Samuel Eto'o, is hopeful that United will bid for the Cameroon striker who could be secured for £18m. However, United appear to feel that Owen, Valencia and potentially Costa could be enough striking reinforcement.

United's growing Brazilian contingent includes the full-backs Rafael and Fabio da Silva, Rodrigo Possebon – on loan to Sporting Braga next season – and Anderson, signed from Porto in July 2007. The club secured a deal last year with Desportivo Brasil which gives them first option on over 120 teenagers whose development in Sao Paulo is being overseen by Carlos Alberto Parreira, the 1994 World Cup-winning coach. United are also understood to have agreed a £5.5m deal with Corinthians for defender Dodo, 17, who is expected to join the club in February.