EXCLUSIVE | By Arsenal correspondent Tony Hughes

Arsenal have given Theo Walcott three options in a bid to end his contract stalemate and stop negotiations dragging on past the summer, Football Insider sources understand.

The Gunners have told Walcott he can have a four-year deal on a lower salary, take up the 12-month extension option in his current deal or leave this summer.

Arsenal are keen to clear up the England international’s situation and determine whether Arsene Wenger will need to replace him in this summer’s transfer market.

As revealed by Football Insider, the 26-year-old is seeking a five-year contract worth £130,000-a-week that would catapult him into the top tier of earners at Emirates Stadium alongside Mesut Ozil and Alexis Sanchez.

However, Arsenal are unwilling to sanction that kind of deal for a player who has been on the fringes of the team since returning from injury last November.

Football Insider understands Arsenal have offered Walcott a four-year package worth £90,000-a-week. This is a drop on Walcott’s current £100,000-a-week salary and a pay cut is unlikely to be accepted by the forward.

As an alternative, Walcott could trigger the option clause in his contract and stay at Emirates Stadium for a further year beyond his current agreement, which expires in 2016.

The latest twist in Walcott’s contract talks raises the possibility that interest from Chelsea and Liverpool will be seriously considered if Walcott does not accept the deal on the table.

Wenger wants Walcott to stay at the club he joined from Southampton in January 2006 but the forward missed almost the whole of 2014 through injury and has made just five starts this season.

The 26-year-old has found himself behind Sanchez, Ozil, Olivier Giroud, Danny Welbeck, Alex Oxlade-Chamberlain, Santi Cazorla and even midfielder Aaron Ramsey in the pecking order for the first-team attacking roles.

Walcott had the upper hand when he signed a new deal in January 2013, but Arsenal are likely to feel they now hold the cards due to the player’s struggle to get into the team.

Wenger has admitted that he does not expect negotiations with Walcott and his advisers to be easy.

“We have started very early with him,” said Wenger. “He is very quick on the pitch, but off the pitch not always.

“Walcott was difficult to convince (in 2013) and that is why it took us much time. I always wanted to keep him and I still want to keep him now.

“I want him to stay and be a regular player and fight for his place, but no matter where you go if it is a big club you have to compete for your place.”