Walcott is now free to sign a pre-contract agreement with a foreign club, but his recent fine form appears to have encouraged Arsenal to ensure that they do not lose another leading player following the summer departure of Robin van Persie.
Despite starting just nine games in the Premier League this season, Walcott is the club’s top scorer with eight goals. Speaking after striking a hat-trick in Arsenal’s 7-3 victory over Newcastle, Walcott said he was optimistic that an agreement could be reached to keep him at the Emirates.
“I’m sure that something will be sorted very soon,” Walcott said
"I've always said I wanted to stay and I enjoy playing for this team. Now we will just see what happens.
"I will continue to play my football and let the people who look after me and the club talk to each other and go from there."
Walcott is believed to have turned down a contract offer in the summer, though the England international has claimed that the delay in signing a new deal was down to his desire to play as a central striker, rather than any financial reasons.
The England international has now led the line in Arsenal’s last four matches.
With Walcott now looking likely to stay, TalkSport reports that Arsenal have dropped their interest in young Crystal Palace winger Wilfried Zaha. The Gunners are one of a number of Premier League clubs to be linked with the 20-year-old, who it is thought could be available for £10 million.
The 20-year-old has suggested that he would welcome a move to the Premier League after earning rave reviews and a first England cap for his performances in the Championship.
Arsenal are still believed to be keen to bring in a forward in the January transfer window, however, and have made an inquiry for Atletico Madrid’s Adrian Lopez, according to the Daily Mirror.
The Spain international has been repeatedly linked with the Gunners and he could be available having fallen out of favor with high-flying Atletico this season. Although Adrian, 24, has a £14 million buyout clause in his contract, the Mirror claims that Arsenal are not prepared to match it.
Adrian, who can operate in a variety of attacking positions, has scored just three goals this season after netting 18 the previous campaign.
One player Arsenal look unlikely to be signing is Wesley Sneijder, with the Sun reporting that the Gunners have rejected the chance to recruit the Internazionale star.
Sneijder, 28, is widely expected to move this month after being frozen out of the Inter side reportedly after refusing to accept a reduction in his wages. And Sneijder’s reported financial demands are believed to be the reason for Arsenal as well as Chelsea ending their interest in the Netherlands international. The former Real Madrid attacking midfielder is thought to earn in the region of £200,000 a week.