Manchester United are hopeful of beating off fierce competition to sign Benfica’s central midfielder Renato Sanches for £46m (€60m) after talks with the Portuguese club progressed well.

The FA Cup finalists are hoping to pay the fee over four years in a deal similar to the one that took Anthony Martial to Old Trafford last summer.

Sanches, who broke into the Benfica first team last autumn, has since signed a new contract that ends in summer 2021 and has a reported release clause of €60m.

While Arsenal, Real Madrid, Paris Saint-Germain, Bayern Munich and Manchester City are all interested in Sanches, United believe they are in pole position to sign him. Benfica are considering the offer that United stagger the payments in instalments.

Sir Alex Ferguson, the former manager and now club director, is an admirer of Sanches and has recommended he be signed, as have United’s highest-ranking scouts.

The club are understood to have had him watched on several occasions and United’s strong working relationship with the player’s agent, Jorge Mendes, may help push the proposed transfer through.

The 18-year-old has been a key presence in the Benfica midfield despite only making his league debut in a 4-0 win at Tondela on 30 October. He has since made 28 appearances in all competitions, including five in the Champions League, and scored twice. He also has two Portugal caps having made his debut last month.

United want Sanches to help freshen up their midfield. Michael Carrick turns 35 in July and is yet to be offered a new one-year deal. Even if he does receive one, the former England man is coming to the end of his career and there is also concern at Old Trafford regarding Bastian Schweinsteiger’s longevity.

The Germany captain is 32 in August and has endured an injury-blighted season following a transfer from Bayern Munich last summer. His club season was ended on 20 March, after United’s 1-0 victory at Manchester City, due to a knee injury and his is fighting to recover for Germany’s Euro 2016 campaign.

Sanches’s youth and dynamism are viewed as ideal for a squad that has struggled to replace Paul Scholes, since he retired three years ago.

With three games remaining of the Portuguese championship Sanches could win the title in his debut campaign. Benfica have 79 points, a two point lead from Sporting Lisbon, with only Guimaraes, Maritimo and Nacional to play.

Sanches was born in Lisbon and has parents who are from Cape Verde.