Newcastle set to make £8m bid for Yakubu

The Portsmouth chairman, Milan Mandaric, last night revealed that a "dialogue" was taking place with Newcastle United over the sale of Aiyegbeni Yakubu. Mandaric also said that he had turned down a £7.5m bid from Aston Villa for the much coveted 22-year-old Nigerian striker.

Mandaric maintained that he was determined to hold on to Yakubu - at least until the end of the season - but his resolve is likely to be tested by Newcastle who are preparing a bid of more than £8m. Discussions will continue today between the two clubs.

At the same time Newcastle expect to complete the signing of the Portsmouth midfielder Amdy Faye for £2m although he will be suspended for Sunday's game at Arsenal. The Senegalese international was due in the North-east for a medical, with Portsmouth resigned to losing the player. Portsmouth earlier rejected a bid of £1.5m from Birmingham City, but Newcastle have now met their valuation.

Having sold Nigel Quashie to Southampton for £2.1m this week, Portsmouth now desperately need to recruit players. Their manager, Velimir Zajec, will fly out to Greece after tomorrow's Premiership match against Chelsea to try to secure the midfielder Angelos Basinas who has been a long-term £2m target at Fratton Park. However, Panathinaikos do not want to sell their captain until the summer and Zajec has two other targets in mind. They are thought to include Dynamo Zagreb's Niko Kranjcar.

Mandaric initially placed a £12m price tag on Yakubu to fend off bidders, but would find it hard to refuse an offer above that already made by Villa, who turned to Yakubu after missing out on James Beattie. So far they have not increased their bid.

"There is a dialogue," Mandaric said when asked of Newcastle's interest. "But we are reluctant to let him go." He said that negotiations over Yakubu and Faye were "separate".

The Newcastle manager, Graeme Souness, declared his interest in Yakubu earlier this week and appears to have finally persuaded his chairman, Freddy Shepherd, to bid now. Souness had discussions with Yakubu's main agent, Pini Zahavi, who has since returned to Israel to talk to Yakubu's previous club, Maccabi Haifa, who are entitled to 50 per cent of Portsmouth's sell-on fee.

Souness's interest in the 27-year-old Faye hardened after another setback to Nicky Butt who has suffered a recurrence of the hamstring injury that has kept him out for the last 11 games. The midfielder, 30 today, could be out of action for months and may require surgery.

At the same time Newcastle are believed to have decided against signing the central defender Sammy Kuffour from Bayern Munich. If Newcastle do not sign another defender this month they will not go ahead with the proposed £3m sale of Andy O'Brien to Villa.