Arsenal are tabling a record new contract offer to unsettled star Alexis Sanchez.

The Sun says Gunners boss Arsene Wenger remains confident the Chile star will stay for next season.

Manchester City are interested in the 28-year-old but Arsenal believe staying in the capital could be a key factor in his thinking.

Sanchez is understood to love the London life and the prospect of staying there works in Arsenal's favour.

Wenger is also refusing to rule out Sanchez signing a bumper new deal.

He has one year left on his current terms.

But a fresh contract worth £275,000-a-week could prevent him moving between Premier League clubs, with Arsenal desperate not to strengthen a direct rival.