Arsenal manager Arsene Wenger's ambition questioned in wake of FA Cup debacle

Arsenal manager Arsene Wenger's refusal to break his wage structure to meet the contract demands of the likes of Alexis Sanchez and Mesut Ozil has been criticised by former Gunners striker Charlie Nicholas.

Germany international Ozil is in the final six months of his Arsenal contract and has refused to sign an extension unless the club offers him a reported £300,000 ($405,000) per week in wages.

The north London club stand to lose both Ozil and Sanchez on a free transfer in the summer, while Jack Wilshere is also nearing the end of his contract and faces an uncertain future.

Nicholas accused his former club of lacking in ambition and added that their elimination from FA Cup at the hands of Nottingham Forest last weekend has added to the unrest at the Emirates Stadium.

"The modern game is creating such wealth but Arsenal are going in the opposite direction, potentially letting £250m worth of playing talent leave in the summer for nothing," he told Sky Sports.

"The same issues have been going on for several seasons and they're now missing out on Champions League funds because of the apparent penny-counting. The club looks as if it has lost all ambition.

"The FA Cup has definitely kept the wolves from the door for a few seasons and now the club are in a position where they're up against it again just to win the Carabao Cup or secure a top-four position. That's not progress."

Nicholas urged Wenger to step down as manager at the end of the season and take up a different role in Arsenal's hierarchy, similar to the role Sir Alex Ferguson has at Manchester United.

"I would prefer him to be upstairs, to still have an input into things, because I don't think he would be too demanding and could help a smooth transition," the former Gunners striker said.

"If he's going to stay on and pick the manager then that's fine, but I wouldn't want him to recommend somebody else and then leave."