Manchester United are in transfer talks with Gremio for attacking midfielder Douglas Costa.

The Times says Douglas, 18, has been closely monitored by United for more than a year, but despite interest from a host of leading European clubs including Real Madrid and Inter Milan, manager Sir Alex Ferguson is confident of signing the player this summer as the Barclays Premier League champions continue to look to Brazil for potential stars of the future.

John Calvert-Toulmin, United's principal scout in Brazil, recommended that Ferguson sign Douglas last summer, but the manager has opted to wait until now to make his move. Douglas is rumoured to have a £21 million release clause in his contract with Grêmio, which has four years left to run, but United hope to secure him for less than that. Any deal would be dependent on the player getting a work permit.