Mikel Arteta’s lawyers are holding final talks with Arsenal to conclude a deal for him to take the manager’s job, a turn of events that has left Manchester City furious.

Arteta, who has been offered a long‑term contract believed to be until 2023, is in line to replace Unai Emery, who was sacked on 29 November, and take the reins from the Arsenal caretaker, Freddie Ljungberg. City are believed to have demanded around £1m in compensation for their assistant coach but are still awaiting formal discussions with Arsenal to settle this.

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City, who beat Oxford United 3-1 last night to set up a Carabao Cup semi-final tie with Manchester United, do not want to stand in Arteta’s way but are not happy with the way Arsenal have gone about their business. A club source said: “It’s surprising to hear that plans are being made by Arsenal to unveil our coach as their head coach on Friday on the basis that no contact has been made by the club to discuss this matter.”

Pep Guardiola refused to speak about Arteta’s future after the win at Oxford. “When there’s news I will answer it but there’s no news,” he said.

Arteta has no experience as a manager, though he has worked alongside Guardiola since July 2016. The former midfielder was a candidate to take the Arsenal job 19 months ago before the club opted for Emery to take over from Arsène Wenger, who on Wednesday backed Arteta but said the 37-year-old Spaniard would need to choose a backroom team astutely.

“I believe Arteta has certainly a great future,” Wenger said. “He has certainly learned a lot in his first position as an assistant coach and after that as well he will have to deal with the fact that he has no experience at that level and he will have to get surrounded well.”

Wenger, under whom Arteta played from 2011 to 2016, added: “I am an Arsenal supporter and at the moment I support the manager in charge and the manager in charge is Ljungberg. When Arteta will be in charge I will support Arteta. He [Arteta] is intelligent, he has passion, he has knowledge, but Ljungberg [does] as well.”

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Brendan Rodgers was on Arsenal’s shortlist this month but signed a new contract at Leicester. Arteta is set to take over a team 10th in the Premier League after winning one of their past nine league games going back to early October.