Walcott has refused the offer of a new £75,000-a-week five-year deal at Arsenal and, with talks having collapsed at the end of August, there has been no further progress on a deal. Arsene Wenger retains some hope that Walcott can still be persuaded to sign, but there is an increasing sense that it is now a question of when and where he goes, rather than if.
Chelsea have previously made several enquiries for Walcott and while Liverpool and Manchester City retain their interest from last summer, Alex Ferguson has now also identified the 23-year-old as a serious potential target.
The attraction for Walcott in joining United is obvious – they are six points clear at the top of the Premier League, and Walcott said earlier this season that he was missing Robin van Persie at Arsenal.
At this stage, no formal contact or offer has been made from United to Arsenal but their interest is genuine and they are now carefully monitoring the situation.
Walcott's contract position means that he could be signed for nothing next summer or possibly at a reduced price when the January transfer window opens in three weeks' time.
Nani, who is out of favour at Manchester United and also out of contract in 2014, has emerged as a possible part of any deal. A fee to United for Nani of around £10m plus Walcott could be attractive to both clubs.
Liverpool, the team Walcott supported growing up, and Manchester City have also been interested. Walcott would prefer a club in the Champions League but will be mindful not to risk joining a squad where he might struggle for regular first-team football.
Chelsea's London location is in their favour, as is the greater potential opportunity for Walcott to play as a central striker than at United where Van Persie, Wayne Rooney, Javier Hernandez and Danny Welbeck are all competing for places.
Arsenal would not want to sell Walcott to a domestic rival but will want to avoid losing him for nothing later in the year when they would have no control over where he goes.
Sturridge has been peripheral at Chelsea even while Fernando Torres has been struggling and Liverpool believe that he can be secured for £12m.
Sturridge has been Rodgers' prime transfer target since the failure to replace Andy Carroll during the summer and talks are understood to be at an advanced stage between the sides.
Sturridge, a former trainee at City, has scored 24 goals in 93 appearances for Chelsea but has been mostly played out wide on the right flank.
His form has been good enough to earn four England caps although he has been restricted by a hamstring injury this season.
An additional £6m deal is also being lined up for Ince, a winger who was sold by Liverpool last year but has since flourished at Blackpool.
Liverpool are entitled to a 35pc cut of any transfer fee as part of the deal that took him to Bloomfield Road, which means their overall outlay would be reduced. (© Daily Telegraph, London)