Chelsea are aiming to beat Manchester City for exciting Lyon midfielder Miralem Pjanic.

Manchester City had a £9m offer for the 19-year-old Bosnian rejected last summer but Chelsea have closed in on Pjanic in recent weeks and are favourites to sign one of Europe's most exciting young talents in January, says the Mail on Sunday.

Sporting director Frank Arnesen watched the second leg of Bosnia's World Cup play-off against Portugal earlier this month.

The received wisdom was that he was there to watch Bosnia strikers Edin Dzeko and Vedad Ibisevic, but in fact it is Pjanic Chelsea intend to buy before the result of their appeal against a two-window transfer ban is determined.

A source close to the player said: "He will be leaving Lyon in the summer and it looks like Chelsea will be his new club."