Manchester City are running out of time to tie James Milner down to a new deal, with the two parties still a long way off reaching an agreement and the England international currently weighing up three proposals from clubs in Spain and Italy including a particularly attractive pre-contract offer that he would be free to sign this month.

While there is no guarantee that Milner will accept any of the opportunities in front of him at the moment – any pre-contract agreement with an overseas club would need to be signed before the end of the January window – the chances of the midfielder remaining at City are receding by the week. Arsenal and Liverpool remain the most likely destinations if Milner chooses to remain in the Premier League after his contract expires in the summer.

City have not yet given up hope of keeping Milner, who joined them from Aston Villa in a £26m deal during 2010. Club officials met with his representatives last week and they are not a million miles apart when it comes to an agreement on the figures put forward in a proposed contract.

For Milner, however, the financial package is not going to determine where and when he signs his next deal. If the former Leeds trainee leaves on a free transfer under the Bosman ruling at the end of the season, he will be well remunerated wherever he pitches up. The burning issue, in his eyes, is what happens on the pitch over the next few years. He turned 29 this month and wants to be playing every week.

Milner gets on well with Manuel Pellegrini, City’s manager, but there is no escaping the fact that he is frustrated with the amount of playing time that he has had under the Chilean and Roberto Mancini before that. Although Milner has featured more regularly this season – he has started 11 Premier League games compared to 12 in the whole of the previous campaign – he is aware that injuries to key players, including Samir Nasri, Yaya Touré and David Silva, have helped his cause at times. When everyone is fit, Milner knows he is not a mandatory pick and is more likely to find himself on the bench.

Being substituted at half-time on Sunday, in the 2-0 home defeat against Arsenal, was a big disappointment and will have done nothing to allay concerns about how he is viewed at City, especially as Nasri was injured for that match and Touré away at the Africa Cup of Nations.

Pellegrini has spoken warmly about Milner’s attributes on plenty of occasions and often expressed his wish to hold onto the player. Yet there was bemusement among Milner’s camp when the City manager intimated earlier this month that an agreement between the club and player was imminent. “I hope that James will stay here and he will sign his contract in the next few days,” Pellegrini said following the 1-1 draw at Everton.

Despite regular and amicable talks with City, the bottom line is that Milner has never been close to signing . Furthermore, while it is likely that the two sides will get together again soon, there are no further discussions scheduled to take place. Perhaps most significantly, it is hard to see how City can satisfy Milner’s desire to be starting more matches.

While the prospect of playing abroad is appealing, and the formal offer that has been tabled in the past fortnight from a top European club has provided serious food for thought, Milner has more to take into consideration since becoming a father last year and it may well be that he arrives at the decision that the timing is not right to venture overseas.

All of which will encourage Arsenal and Liverpool – Chelsea tried to sign Milner when he joined City from Villa but are not believed to be interested this time round – that there is a golden opportunity to pick up an England international, still under 30, on a free transfer in less than six months’ time.