The Arsenal hierarchy remain steadfast in their support of Arsène Wenger, despite the Champions League humiliation at the hands of Bayern Munich, and they believe he can pull the club out of their slump and prove he deserves to stay on as the manager beyond the end of the season.

Wenger’s critics were given more ammunition on Tuesday night when his team crashed to a 5-1 home defeat against Bayern in the second leg of the Champions League last 16 to exit 10-2 on aggregate. It was the seventh season in succession they had gone out of the competition at this stage and it added up to a fifth loss in the last seven games in all competitions.

There are numerous continuing issues behind the scenes – some of which are linked to the uncertainty over whether Wenger will stay or go when his contract expires this summer. He has been offered a new two-year deal.

The search for a new academy manager to replace Andries Jonker, who left at the beginning of last week to become the coach at Wolfsburg, has been put on hold – as Wenger would have the final say on the appointment – while several members of the playing squad are considering their futures. Top of that list is Alexis Sánchez, who will enter the final year of his contract in July and is believed to have a massive offer from a rival club on the table. It is this that has emboldened him to demand a non-negotiable pay rise at Arsenal to about £250,000 a week.

Sánchez was involved in a training ground bust-up last week, which led to Wenger dropping him from the starting XI for Saturday’s 3-1 defeat at Liverpool. The Guardian understands that he had a furious row in the dressing room after the session with Laurent Koscielny.

Mesut Özil, who will also enter the final year on his deal in the summer, is locked in a stand-off over fresh terms, with no sign of an imminent breakthrough, while Alex Oxlade-Chamberlain – another player who is set to enter his final 12 months – will consider his future at the end of the season.

Oxlade-Chamberlain has grown frustrated at his revolving role – from central midfield to winger to substitute. He excelled in the No10 role against Bayern on Tuesday and he sees his future in a central position. Kieran Gibbs and Jack Wilshere, who is on loan at Bournemouth, are two more Arsenal players whose contracts expire in June 2018. The club have not approached Oxlade-Chamberlain, Gibbs or Wilshere about new deals.

The climate is one of unease. As recently as four weeks ago, there was a confidence at the club’s top level that Wenger would sign his new deal but since then he has come to look increasingly beleaguered and washed out. Nobody seems to know for sure what Wenger will choose to do and there is the clear impression of a club bouncing from one match to the next, with everybody praying for an upturn in results.

Mixed messages have dominated over recent weeks. But what remains clear is that the chief executive, Ivan Gazidis – who in effect runs the club on behalf of the majority shareholder, Stan Kroenke – and the chief negotiator, Dick Law, retain faith in Wenger. They prize his record of consistent achievement and have not been spooked by the recent downturn. They are well aware that there remains almost a third of the Premier League season to play. It should also be noted that they do not believe there to be an outstanding candidate on the market to replace Wenger.

As if the manager did not have enough problems, he has had to deal with the outbreak of a virus in the squad. It affected Özil – he has only just shaken it off – and, on Tuesday, it got to Danny Welbeck and Alex Iwobi, ruling them out of the Bayern game.

Theo Walcott believes it is simply time to consign the recent flashpoints to the past – notably the Sánchez training-ground bust-up – and rally together behind Wenger. “Things have happened,” he said. “We can’t be fighting each other. We need to take the pressure off the manager and that will happen by performances.”