The 23-year-old is currently unwilling to pen the £75,000-per-week deal being offered by the Gunners, as he hopes to receive a significant rise on the quoted figure.
It has been rumoured that Arsene Wenger is willing to let the flying winger leave in January, but Walcott is aware that should he run his contract down he could earn a far superior wage with any potential suitor, due to a lack of transfer fee.
Walcott is currently Arsenal’s top goal scorer this term, with ten strikes, but has struggled to hold down a regular spot in the starting XI.
It’s believed that Wenger is keen to bring in attacking reinforcements during the transfer window, but with his wide-man failing to commit, the Frenchman will face a headache.
Meanwhile, the club have tied Jack Wilshere down to a long-term contract and are said to be close to agreeing similar deals with Aaron Ramsey, Kieran Gibbs and Alex Oxlade-Chamberlain.