Arsenal fall short of Defoe's £8m price tag

Jermain Defoe has been told he can leave West Ham United if a transfer fee of £8m is paid. So far a "handful" of clubs have expressed an interest in the unsettled striker - who is desperate to leave - but have not come close to the valuation.

Defoe and his advisers favour a move to Arsenal, but fear they do not have sufficient funds. A bid of just £5m is understood to have been made - and rejected - for the 21-year-old, who has less than 18 months left on his contract.

West Ham have come to the conclusion that Defoe can go to generate more funds in order to allow the manager, Alan Pardew, to rebuild his team. There is also an acceptance that the club is unlikely to be promoted back to the Premiership this season and may still have to stave off administration.

Pardew sold David James to Manchester City for an undisclosed fee this week and, although he is determined not to let Defoe go at a knock-down price, West Ham will accept a fee substantially less than they would have expected last summer. They are still hoping for £10m, but will take £8m, of which Charlton Athletic, his former club, will receive 15 per cent.

Pardew said: "There's no way Jermain will be going to Arsenal for £5m." But he added: "The top three clubs have a power we can't match." Manchester United - who have a long-standing interest - and Chelsea are monitoring the situation.

However, Pardew added: "There's been no interest from any Premiership club for Jermain. I talk to managers and he's discussed, but no more than that. I think it would be foolish to suggest he's going nowhere. I don't want Jermain to go, but if he goes, the money that will release will give me a fantastic chance of building a team."

Defoe has scored 15 goals this season, but has also been sent off three times and has made clear that he no longer wants to stay, having had a transfer request rejected the day after the club were relegated.

West Ham, having taken the Bolton Wanderers full-back Anthony Barness on loan, were in talks over a part-exchange deal involving the defender Ian Pearce and Fulham's Andy Melville. Pardew also wants to loan out Rio Ferdinand's younger brother, Anton, and is talking terms with the Austrian midfielder Markus Schopp.