Premier League club's Liverpool hard stance on not selling Uruguayan striker Luis Suarez has brought Arsenal to draw up a Plan B of acquiring Swansea's Michu or Man City's Edin Dzeko.
According to the Mirror, Gunners boss Wenger still sees Suarez as his No.1 priority and they are likely to go back with an improved bid, but their chances of persuading the Kop club to sell appear to be fading.
The report said that Arsenal passed up on interest in David Villa, Gonzalo Higuain and Stevan Jovetic to move for Suarez, but the Reds' entrenched position has seen them knock back two bids and even an improved offer of around 45million pounds may not be enough.
Suarez is keen to go and may yet ask for a transfer to try to force a move, and there is also the chance that Real Madrid may come in if they cannot land Spurs' Gareth Bale, the report added.