Liverpool: Manchester City prepare cash plus Edin Džeko deal for Raheem Sterling

Manchester City are set to offer a player plus cash deal for Raheem Sterling, with Edin Džeko expected to make the trip to Anfield in return for the England international in the summer, according to the Sunday People.

The 20-year-old has refused to extend his contract with the Reds and is expected to be on his way out of the club in the summer, with a host of clubs, including Manchester United and Arsenal vying for his signature. However, City have surged ahead in the race with an attractive offer, which would vastly alleviate Brendan Rodgers' troubles up front, where they have been extremely short following the departure of Luis Suarez and an injury to Daniel Sturridge.

Džeko has failed to get into the first team on a regular basis this season and with the signing of Wilfried Bony will see his appearances for the club further dwindle, which would not be a favourable outcome for the 29-year-old. The complete deal is expected to set City back by up to £50m, but will also help comply with the FA's homegrown quota of players, which they failed to match this season.

However, the only roadblock in the deal seems the player's preference to move back to London, making Arsenal and Chelsea favourites to broker a deal for the forward. The Blues are yet to make any advances for Sterling but the Gunners are reportedly increasing their interest in the player and are willing to offer Theo Walcott as part of the deal to sweeten the move.

Walcott has failed to get into the first team on a regular basis this season and has only a year left on his currrent contract. Sterling will add some much-needed guile on the wings, which given Walcott's lack of dribbling ability has made it difficult for the Gunners to break down teams, as evidenced by their performance in the last few games.