Real Madrid were reported to have offered Arsenal manager Arsene Wenger a three-year contract worth 12 million euros on dollars).
Wenger admitted Tuesday he had talks with Madrid officials but said he had two years left on his contract with the English Premiership side and was not going anywhere.
But the ABC daily said Wednesday sources close to the club claim a deal is in place over three years.
The paper said it was the fifth time Wenger had met Madrid officials and insiders claim the club are waiting on the Frenchman to make a decision.
Arsenal said Tuesday they they were "not perturbed" by rumours that Wenger held talks with Real Madrid club president Florentino Perez, director of sport Jorge Valdano in a private room at the Plaza Athenee Hotel in Paris last week.
"Arsene himself has reiterated his commitment to the club on a number of occasions and we see no reason to pass further comment on the subject," the club said.
Wenger admitted he saw "a lot of people on Friday" and pointedly did not deny the meeting but the Madrid officials denied having met him.
Wenger might be put off by lack of control over transfers as signings for the Spanish giants are overseen by Valdano.
Current Madrid coach Vicente del Bosque has pleaded for a central defender for the last three years only to see the club sign forwards Luis Figo, Zinedine Zidane and Ronaldo.
But Real would be keen to snap up Gunners' captain Patrick Vieira if Wenger went to Madrid.
Del Bosque, yet to be offered a new deal for next season, told the As daily he was not surprised to read that Madrid had been in contact with Wenger.
"It's normal. But I'm confident of signing a new deal," he said.
Del Bosque has twice landed the Champions League and La Liga once since taking over from John Toshack three years ago but he did not deny he faced the sack if Real failed to clinch the title this year.
"I don't know what will happen," he said.
Real Madrid are one point behind Real Sociedad with three games to go.
All Content is Copyright © 2003 WorldSoccerNews.com and AFP. All rights reserved. This material is intended solely for personal use. Any other reproduction, publication or redistribution of this material without the written agreement of the copyright owner is strictly forbidden and any breach of copyright will be considered actionable. 2003