Arsenal and Chelsea are watching Eric Garcia's situation at Manchester City.

The Daily Star says Garcia agreed a free transfer move to Barcelona earlier this season - but the cash-strapped Catalan giants have now changed the terms of that deal.

They want the 20-year-old to accept a lower fixed salary, with the rest made up of bonus payments based on performance.

That has opened the door for rival clubs - with Arsenal and Chelsea among those who had previously approached the Spain defender, whose contract expires in June.

Gunners boss Mikel Arteta worked with Garcia at City and is a big fan, and Chelsea are also on the lookout for young centre backs.

Both clubs have the financial firepower to beat Barcelona's offer to the player, who had verbally agreed terms on a five-year contract.