Manchester City assistant coach Mikel Arteta is close to a return to Arsenal as manager of the club where he spent five years playing.
City will reportedly not stand in the Spaniard's way, should he wish to take on the role, but is unimpressed that he has been approached without its consent.
Reports suggest the Premier League champions will demand a seven-figure sum in compensation, should he leave.
Speculation linking the City assistant with the vacancy at the Emirates Stadium has intensified, after pictures emerged of Arsenal managing director Vinai Venkatesham outside Arteta's house in the early hours of Monday morning (UK time).
Two meetings are understood to have now taken place and City is upset that the north London club did not ask for permission to speak to Arteta.
City played at Arsenal on Sunday and no approach was made, when club officials met.
But City does not have an issue with 37-year-old Arteta and will allow him to make his own decision.
Arteta spent five years as a player at Arsenal, including a spell as captain, and now looks set to return to the capital for his first managerial role.
Sunday's 3-0 defeat to City increased the need for the 'Gunners' to end the uncertainty over the position, leaving the club as close to the relegation zone as they are to the top four.
Kevin De Bruyne's first-half masterclass tore them to shreds, as he scored twice either side of teeing up Raheem Sterling for the second.
Interim head coach Freddie Ljungberg replaced Unai Emery after his sacking last month, but has won just one of his four league games at the helm, while the club is on a run of just one win from 12 games.
Nicolas Pepe insists the Arsenal players must "wake up" and find a response, as he refuses to point the finger of blame at Ljungberg.
"Us players have to do better quickly," the club-record signing said. "We have won only one game out of the last 12.
"It is not enough, we are Arsenal. It is about us, not the coach or anything else.
"We have to wake up quickly, starting against Everton.
"Freddie tries hard, he talks to us, but nothing has changed much in terms of results. It's down to us the players, not the coach."
Reuters
