Manchester City boss Manuel Pellegrini is hopeful James Milner will stay at the Etihad and sign a new deal at the club soon.

Milner’s future at City has been the subject of plenty of debate in recent weeks and he has been linked with a move away in the current January transfer window.

The England international said at the start of the season he was delaying putting pen to paper on fresh terms to see how much of a regular starter he would be in Pellegrini’s side and he has been a key man so far – making 10 Premier League starts and coming off the bench eight times.

The former Newcastle and Aston Villa man’s contract expires in July but the City boss is confident he will sign a new deal at the Etihad as ongoing negotiations continue.

He said: “I hope that James will stay here and he will sign his contract in the next few days.”

Milner is believed to be a top target for Liverpool boss Brendan Rodgers, who admitted he was a fan of the 29-year-old when asked about a potential move to Anfield at a recent press conference.

Arsenal have also been monitoring Milner’s situation but the Merseysiders appear in the driving seat to land him should the midfielder, who has also been used as an emergency striker by City this season, opt to leave the champions.

Milner did not play in City’s 1-1 draw at Everton on Saturday but will hope to be involved when Arsenal visit on Sunday (City 1.76, Arsenal 4.46, draw 3.60).