Manchester United believe they have the financial muscle to hold off a late bid from Chelsea for Alexis Sanchez.
Manchester City have already dropped out of the race for the Arsenal striker – refusing to meet an overall package that could cost as much as £65m.
But Chelsea are understood to have declared their interest in a player Antonio Conte wanted to take to Stamford Bridge in the summer.
United are still believed to lead the race for the 29-year-old, with Henrikh Mkhitaryan potentially heading in the opposite direction.
Executive vice chairman Ed Woodward has shown how serious he is about landing the most sought-after player during this transfer window by gazumping a deal City thought they had secured for Pep Guardiola’s long-term target.
Jose Mourinho’s move for Sanchez at the start of this month had a dramatic impact on City’s plans, who had already seen a £60m deadline day deal collapse last summer.
They remained confident they would land the Chilean in January or at the end of the season – but United’s willingness to meet Arsenal’s asking price, as well as offer improved personal terms for Sanchez, has put them in the driving seat.
City finally ended their interest following a conference call between chairman Khaldoon al Mubarak, chief executive Ferran Soriano, sporting director Txiki Begiristain and manager Guardiola on Monday morning.
They determined they were unwilling to meet such a significant financial package for a player who is out of contract at the end of the season.
There was also the belief Chelsea’s interest could see that price rise even higher.
United, meanwhile, believe they will be signing one of the world’s best players for what is a relatively modest price in the current market – even if he is a free agent in the summer.
Should Mkhitaryan’s departure offset some of that outlay, it is seen as an even better deal.
They already beat Chelsea to the signing of Romelu Lukaku in the summer – despite the Belgian being a boyhood fan of the reigning champions and former player at Stamford Bridge.
And there was little concern within the club when Chelsea’s interest in Sanchez emerged on Monday night.
Discussing Sanchez’ potential move following the 3-0 win against Stoke, Mourinho said he was “Not confident, but also not unconfident.
“Just relaxed, and with the feeling that he is an Arsenal player, with the feeling that he can stay there, but also with the feeling that he can move, and if he moves, I think we have a chance.
“I think most probably a player like him has other big clubs interested. Who knows?
“I think him, (Arsenal manager Arsene) Wenger, (Arsenal chief executive Ivan) Gazidis – I think they are the ones that know really what is going to happen.”