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Theo Walcott and Arsenal are finally discussing a new contract.

The England winger is in negotiations about a new five-year deal that will make him one of the Gunners’ top earners.

Walcott’s representatives had discussions with Arsenal on Friday as boss Arsene Wenger seeks to tie the 23-year-old down for the long term.

As it stands, Walcott has only one year left on his current deal, which lead to fears that Arsenal may sell him this summer - as they have done with Robin van Persie - to stop him leaving for free at the end of the season.

But Arsenal have their fingers crossed that a pay-rise to over £70,000-a-week mark will convince Walcott to re-sign - indeed, the club are confident he will stay even if he does not put pen to paper before the summer transfer window closes.

Wenger said: “I hope he will stay, and that’s it. There is big competition going on everywhere. We have so many players in midfield and on the flanks but Theo is a very important player for me.

“Negotiations continue, at the moment not directly with me, but we try to sort it out, and we will try to sort it out one way or the other.

“We want to extend his contract, and to keep him at the club - but you need not only our desire. His desire is also right, he wants to stay and we need to find an agreement.

“I could spend all of my press conferences dealing with the if question. But let’s live in the real world. At the moment both parties are around the table.”

Walcott is set to start at Stoke on Sunday.

Wenger may yet shake-up his squad further after

Elsewhere, Wenger may yet tinker with his squad further in the coming week despite apparently losing out to Liverpool over Real Madrid midfielder Nuri Sahin.

Misfit forward Park Chu-Young is a target for Spain's Celta Vigo, who want to sign him on a one-year loan with an option to buy.

Another frontman, Nicklas Bendtner, is still seeking a new club.

Arsenal are still in the market for a midfielder and a versatile defender capable of playing right-back and centre-half.

Toulouse’s France international Etienne Capoue is a target for the midfield slot, while Montpellier defender Mapou Yanga-Mbiwa is also an option although his price-tag may prevent a deal.

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Ajax’s Gregory van der Wiel has been a target as he has just one year left on his deal, but would have to agree to be understudy to first-choice right-back Bacary Sagna once he's fit.

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Wenger expects a tough game at Stoke but - after so many spats at the Britannia and also with opposite number Tony Pulis - actually paid them a compliment in his pre-match press conference.

“They changed their style last year when they played more on the ground because of being in Europe," he said. "I think it will go on like that.”

Gunner hang 'em up: Ljungberg retires at age 35

Former Arsenal fan favourite Fredrik Ljungberg has announced his retirement from the game.

The 35-year-old Swede, who has been without a club since his contract with J.League side Shimizu S-Pulse ended earlier this year, admits he no longer enjoys preparing for matches.

"It's still fun to play the big games, but when you no longer have the motivation for training then it's time to call it quits," he told Swedish broadcasters SVT.

"This is a decision which has come about during a six-month absence.

"During my career I've had the possibility to play with some of the best players in the world, as well as some of the best teams.

"I'm grateful for everything football has given me and all of the fantastic people I've met during my career."

Midfielder Ljungberg enjoyed spells with West Ham, Celtic, Halmstad, the Chicago Fire and the Seattle Sounders, but is best known for his nine seasons with the Gunners, where he won two Premier League titles, was part of the unbeaten "Invincibles" team in 2003-04 and made some remarkable hairstyle choices.

He also won 75 caps with Sweden, scoring 14 goals.