The Gunners agreed a deal in principle for the 22-year-old last summer for a reported £92 million, but Lemar turned down the move on deadline day and is now thought to be leaning towards a switch to Anfield.

Jurgen Klopp is a keen admirer of the France international and apparently views him as a long-term replacement for Philippe Coutinho.

Atletico Madrid have also been keeping a close eye on Lemar's progress, but Liverpool remain in the driving seat to secure his signature when the transfer window reopens.

Meanwhile, The Sun adds that Liverpool and Arsenal are also duking it out for Benfica midfielder Bryan Cristante.

The 23-year-old is currently on loan at Atalanta, where he has scored seven goals in 24 Serie A appearances this season.

Cristante started his career at AC Milan and is valued at around £27m after making his Italy debut last October.