Manchester City are ready to cash in on Matija Nastasic next month.

The Daily Mail says Schalke and AC Milan are leading the chase for City defender Nastasic.

The 21-year-old, who joined team-mates on their Christmas party in Manchester on Wednesday night, is surplus to requirements at the Etihad.

Inter Milan coach and former City boss Roberto Mancini is a confirmed admirer but it is their city rivals AC Milan and Schalke who have shown the most interest so far.