Newcastle United have reportedly had a £1.5 million bid for Swedish winger Sebastian Larsson accepted by Birmingham.
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Magpies manager Alan Pardew is eager to sign Larsson after his bid to to sign David Bentley from Tottenham Hotspur hit the skids.
The former Arsenal midfielder has six months left on his contract at St Andrews but has turned down improved terms from Birmingham.
Sunderland are also chasing the signiture of Larsson, but manager Steve Bruce is only prepared to pay £1 million for the 25-year-old.
However, Birmingham's first team coach Peter Grant is still hopeful Larsson will remain at the club and sign a new contract.
"The manager [Alex McLeish] has spoken to Seb's agent and it's ongoing," Grant said. "I think Seb would obviously be keen to stay - and the club are looking for him to stay also. But it's down to him and his agent who is speaking to the club at the moment. That's as far as it's gone.
"We're not kidding ourselves on. We just hope that Seb wants to stay with us. I'm sure that's the case and I think he's proved that with his performances this season. But, if he decides to move elsewhere, you can't do anything about it. That's the situation with the Bosman ruling now.
"Sometimes the big players have the opportunity and the agents can make that happen.''