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Manchester City are prepared to risk missing out on Alexis Sanchez - possibly to Manchester United - rather than pay Arsenal's £35m asking price.

It is also understood Sanchez's agent wants £5m for his part in the deal, taking the overall tally to £40m - double what City are willing to pay.

Sanchez, 29, will leave the Gunners in January if a suitable offer arrives and a replacement is secured.

United boss Jose Mourinho said Sanchez is a "phenomenal player" on Friday.

"Sanchez is an Arsenal player," Mourinho added. "I don't know but probably this weekend he is going to defend Arsenal colours, so I don't think it's correct to say things about Alexis Sanchez.

"Myself and the Manchester United board and owners, we don't believe a lot in the January market. We don't believe in signing a player just to sign a player.

"What we believe is there are some players in the football world, if you have the chance to sign them in January, March or July, you have to try. And that's it."

French side Paris St-Germain have also been linked with the Chile forward but Sanchez's preference is to join Manchester City.

However, given Gabriel Jesus' knee injury is now not as bad as initially feared - City boss Pep Guardiola said on Thursday the Brazil forward could be back in action "in two or three weeks" - the club do not view such a huge outlay on a player who would be available for nothing in the summer as being worthwhile.

City also feel the player is determined to leave Arsenal come what may this month, so their stance could lead to him joining a rival club.

Guardiola would not be drawn on his interest in Sanchez at Friday's news conference before their trip to Liverpool on Sunday.

He said: "I don't answer. I understand the question, you do your job, you know my answer. I'm focused on Liverpool."

It is understood the Gunners hierarchy have accepted that Sanchez is likely to depart after three and a half years at Emirates Stadium.

However, Arsenal are reluctant to sell without replacing him and their first choice is Bordeaux's 20-year-old Brazilian forward Malcom.

"Normally he would stay until the end of the season - but we'll see," said Gunners boss Arsene Wenger.

Speaking at a news conference on Friday, the Frenchman added: "Nothing is really concrete at the moment and nothing is decided one way or another. Of course I want a quick resolution."

If a deal cannot be agreed with any club, Sanchez will be able to leave when his contract expires in the summer - a situation Arsenal are keen to avoid as they would receive nothing.

Sanchez almost joined City for about £60m on the final day of the summer window, only for the transfer to collapse when Arsenal failed to sign Monaco and France midfielder Thomas Lemar.

Sanchez's time at Arsenal July 2014 - joins Arsenal for £35m from Barcelona on a four-year deal, despite interest from Liverpool and Juventus May 2015 - finishes the season as Arsenal's top scorer with 25 goals, including a goal in the FA Cup final win over Aston Villa May 2016 - finishes season with 17 goals, despite missing over a month with a hamstring injury, but the Gunners fail to win a trophy May 2017 - top scores for Arsenal again, with 30, as they win the FA Cup but fail to qualify for the Champions League August 2017 - agrees a £55m move to Manchester City, but Arsenal cancel the deal when they fail to sign Thomas Lemar to replace him January 2018 - after the forward scores eight goals in the first half of the season, City again consider signing him with six months left on his deal

'It would be a coup for United over City'

Former Manchester United defender Phil Neville said Sanchez would be an "absolutely unbelievable signing" for the Old Trafford club.

"If you look back at Manchester United's big signings over the decades, Eric Cantona came out of the hat, [Robin] van Persie was a surprise - and they both helped United win titles," Neville told Sky Sports.

"This could have a similar impact. He's got the character to play at Old Trafford. It would be a coup, particularly for United fans, to have a player like Sanchez come to them over City. It would be a strong statement."

Meanwhile, former Chelsea goalkeeper Mark Schwarzer has told the BBC that Arsenal should have cut their losses on Sanchez sooner.

"It was an unbelievable offer from Manchester City," said Schwarzer.

"They should have got rid of him. He's not the same player and his mind hasn't been at Arsenal this season. The sooner they get rid of him, the better for Arsenal."

Analysis

Former England, Newcastle and Spurs midfielder Jermaine Jenas on BBC Radio 5 live:

Sanchez has got the power. He either goes now for a decent price or in the summer for free. If Manchester City will only pay £20m they've probably had assurances he has his heart set on them. Manchester United bidding more is beneficial for Arsenal, but not Sanchez.

It's the beauty of the position he's in. It's been so poorly managed, he can do whatever he wants. He doesn't even have a World Cup to prepare for.

Former Scotland, Sheffield United and Everton midfielder Don Hutchison:

Sanchez is holding all the cards and the power. He'll look at the two clubs and their style and where he'll fit in. And that's Manchester City.

I don't think Sergio Aguero will be at Manchester City come the summer, and then Sanchez walks into their side.

I had four clubs to choose from at one stage but I moved to the club who paid me the least because it's the one I wanted to go to - Sunderland, which was back home for me. I was losing £250,000 a year for four years.

If he has his heart set on City and Pep, there's nothing money can do.