The 23-year-old England international is stalling on signing his latest contract with the Gunners as the club refuse to match his wage demands, offering him a five year deal and £75,000-a-week. With out of favour squad players such as Andrey Arshavin on higher wages, he feels he deserves more than what he is being offered.
Chelsea have been long term admirers of the player while it is believed that Manchester City and Liverpool still retain their interest from the summer. Sir Alex Ferguson has now also identified Walcott as a target and looks keen to bring him to Old Trafford.
The winger established a good relationship and understanding on the pitch last season with Robin van Persie for Arsenal, and this will be an attraction both for Ferguson to make a move for the player and for him to want to join the Red Devils.
It was also reported that Nani has emerged as a target for Arsenal, and with Ferguson displaying his interest in Walcott, a deal involving a fee plus Walcott in return for Nani moving to Arsenal could be ideal for both clubs.
Walcotts contract situation means that he could leave for nothing in the summer and Arsene Wenger will want to avoid that scenario, meaning a January move for the frustrated winger is looking increasingly likely.
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