Chelsea are in contention to sign Mahmoud Dahoud from Borussia Mönchengladbach in the summer but face competition from a host of leading European sides including Borussia Dortmund, Paris Saint-Germain and Juventus for the highly rated Germany midfielder.

Dahoud, 21, is out of contract at Gladbach in summer 2018 and has refused to sign an extension, with the German side understood to be prepared to sell him at the end of the season. Despite reports in Germany on Friday that he has already agreed to join Dortmund for around €10m, it is believed the midfielder’s representatives have also held talks with other clubs including Chelsea in the last few weeks as they seek to negotiate his transfer.

Antonio Conte’s side have been in the market for a box-to-box midfielder for several months and made enquiries about Atalanta’s Ivorian international Franck Kessié in January, but Dahoud would also fit the bill for the Premier League leaders. However, they face serious competition from Dortmund, with PSG and Juventus also in the frame for a player who has already won six caps for his adopted country and is expected to make his decision about where to move in the coming weeks.

Liverpool had also expressed an interest in the player, who was born in Syria but moved to Germany before his first birthday, with Jürgen Klopp having failed in an attempt to sign him last summer because Gladbach were unwilling to allow him to leave after selling Granit Xhaka to Arsenal. It now appears that interest has faded, although it remains to be seen whether Liverpool will make a last-ditch attempt to lure him to Anfield.

Dahoud, who was 10 months old when his family fled the largely Kurdish town of Amuda on Syria’s northern border with Turkey, has also represented Germany at various youth levels and came close to being selected for Joachim Löw’s Euro 2016 squad. He scored five goals and registered nine assists last season and ran an average of 13km a match, the second highest in the Bundesliga, but has endured a more testing campaign this season as Gladbach have struggled in the lower half of the table.

Meanwhile, Conte is optimistic Diego Costa will stay at Chelsea but says the striker’s future will be addressed at the end of the season. Costa, Chelsea’s top scorer with 15 goals this term, was linked with a move to the Chinese Super League last month.

Speculation soon subsided and more recent reports have suggested Costa is close to agreeing an extension to his Chelsea contract, which has two years to run come the summer.

“I don’t know about this situation,” said Conte, speaking before Saturday’s FA Cup fifth-round tie at Wolves. “I think now it’s very important to be focused on the present and not to look so far forward. At the end of the season we will see the situation.”

He was then asked if he was confident the 28-year-old Spain striker would be staying.

Conte said: “Yes, I’m confident. I repeat: now it’s important to keep the great concentration for the present.

“The present is tomorrow’s game against Wolverhampton. We must go in the next round.”

One striker who is nearing a Chelsea exit is Dominic Solanke. The 19-year-old has reportedly demanded £50,000 a week in wages.

“I think this is his will [to leave],” Conte said. “I have spoken with him to try to understand his will. But we must have great respect for every decision that the player can take. His contract expires in June and he has the full will to stay in Chelsea or to go away.”