Arsenal boss Arsene Wenger is preparing for life without William Gallas.
The Telegraph says the defender missed Monday's deadline to commit his future to the club.
An offer of a new one-year contract is on the table, but Gallas wants the security of a two-year deal at a wage that Arsenal are not prepared to meet.
There was hope that some compromise could be reached but manager Wenger decided he must move and take positive steps towards finding a replacement if there was no resolution by the end of May.