West Ham are holding out for a contract worth at least £100 million, and Arsenal’s second offer for captain Declan Rice was turned down.
The north London team made an offer of £75 million plus £15 million in add-ons, which West Ham believes will be challenging to deliver and has been informed will require at least £100 million to complete a transaction.
Arsenal had an initial £80m offer rebuffed last week with the Gunners keen on securing the service of Rice ahead of the pre-season.
They remain optimistic of signing the England midfielder but Manchester City are monitoring the situation as they await a decision from Ilkay Gündogan on whether he will extend his stay.
It is understood Arsenal had assumed that £80m would be enough to get Rice after being told so prior to the opening of the transfer market.
However, the price tag of the English international has jumped up since West Ham’s triumph in the Europa Conference League final.