Pep Guardiola was reported to have offered around £30m plus Raheem Sterling for the Chile international.
Arsenal were said to have demanded cash plus Sergio Aguero as a counter offer which was swiftly rejected.
Now, fresh reports say the Gunners are still holding firm over Sanchez but want over £70m.
They would still consider a player coming in return but want more than the £30m on offer.
The Independent say that no player was offered by City but this is considered as a softening of Arsenal’s stance by the Etihad club.
The Gunners have insisted all summer that Sanchez will be going nowhere in this window.
But following direct contact between the two clubs, and Arsenal’s counter offer, Guardiola is increasingly confident of doing a deal.
City are now said to be unwilling to let a player leave in return for Sanchez and are ‘confident’ they can get a cash-only deal done.
Sanchez is away in Chile on international duty but will still be able to complete a move should a deal be struck.
The South American champions have a legal and medical team on standby in order to minimise the time spent in completing the transfer.
