AC Milan chiefs are watching Fernando Torres' situation at Chelsea closely. Torres was dropped for Chelsea's victory at Sunderland, with English striker Danny Sturridge shining in his absence.

Milan failed to deliver their 'Mr X' in the summer market and have the funds available to bring Torres to Italy in January. Local sources say a swap deal could be proposed, which could lead to discussions involving Alexandre Pato, a favourite of Chelsea boss Andres Villas-Boas.

For the moment, no formal contact has been made, but Rossoneri powerbrokers Adriano Galliani and Ariedo Braida are keeping tabs on the situation.

In their favour is Chelsea will be reluctant to sell to a Premier League rival, while the former Atletico Madrid captain insists he wouldn't consider a return to Spain at Real Madrid.

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