Arsenal and Liverpool target James Milner has been offered a new deal by Manchester City - but 'must decide what is better for him'

Manuel Pellegrini says an offer is on the table to stay at the Etihad

(Getty Images)

Manchester City manager Manuel Pellegrini says James Milner's future is still to be decided.

The England man, 29, is out of contract in July and has been heavily linked with moves to Liverpool and Arsenal.

It has been reported that Milner is unhappy at being a utility man at the Etihad and wants to play regular first-team football in his favoured central midfield position.

But Chilean Pellegrini says that Manchester City have offered Milner a new contract and believes that the only player to "say goodbye" in the final match of the season was Frank Lampard, who had already agreed a move to New York City FC.

Frank Lampard was given the bumps after his final game in England (Getty Images)

"I think the only player that said goodbye was Frank Lampard," said Pellegrini.

"Yaya returned in the last game after an injury of 15 days - he finished very tired and he couldn't finish the last game either. I didn't want him to have some muscle injuries and that is why I changed him.

"Milner had an important kick in his knee, that is why he couldn't finish the game.

"We will see, not only for those two names, who will stay here or not. That was not the reason why they were changed."

Milner has been offered a new deal and fans called for him to stay during the game, but the 29-year-old still has a decision to make.

Pellegrini said: "James said he was taking the decision at the end of the season. He is a very important player and he gave us a lot of spirit in this year but he must decide what is better for him."