Eddie Nketiah has rejected a contract offer from Arsenal.
The Daily Mail says Arsenal have refused to concede defeat in their attempts to keep Nketiah, whose existing contract expires next summer.
Mikel Arteta has spoken publicly about his hopes to keep the 22 year-old and that has been firmed up by Arsenal's fresh bid to resolve his long-term future.
However the striker's priority is to play regular football rather than secure improved terms, and an exit currently remains the most likely outcome.
Nketiah turns 23 in May and would be able to make a cross-borders transfer after that age which would leave Arsenal entitled to no compensation.
German side Borussia Monchengladbach are among his admirers and Nketiah is free to arrange a pre-contract with a foreign club from January 1.
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