Real Madrid and Arsenal are haggling over a fee for Jose Antonio Reyes.

Real president Ramon Calderon admitted yesterday that a permanent deal for the Spaniard was being discussed and AS says the two clubs are now thrashing out terms over a fee for the winger.

Arsenal are willing to drop their original £8 million valuation to £7 million, however Real have made an opening bid of £4 million for the ex-Sevilla striker. Negotiations will continue today.