Manchester City remain keen on Everton midfielder Mikel Arteta.

The Guardian says City have put £50m aside for James Milner at Aston Villa and Arteta of Everton.

City are still confident of signing Milner despite an initial offer of £20m being rejected. City are simultaneously trying to establish whether Arteta could be tempted from Everton but have rubbished reports they are talking to Real Madrid about signing the midfielder Fernando Gago and striker Gonzalo Higuaín.