Arsenal and Newcastle United are reportedly ready to go head to head in the race to sign Lyon midfielder Lucas Paqueta this summer.

The 24-year-old has been heavily linked with a move away from the Groupama Stadium this summer as a result of his eye-catching performances for the Ligue 1 outfit.

French giants Paris Saint-Germain were thought to be the front-runners for his signature, but recent reports suggest that they have cooled their interest as a result of Paqueta's wage demands.

The Brazil international allegedly wants around £180,000 a week at his next club, while Lyon are holding firm on a £58m asking price.

Despite those figures, Chronicle Live reports that Newcastle and Arsenal are still keeping tabs on Paqueta's situation, with the view to a possible summer move.

Newcastle are once again expected to invest heavily in their squad in what will be their first summer transfer window since being taken over by Saudi Arabia's Public Investment Fund in October.

The Magpies have recent experience of dealing with Lyon, having spent around £38m to sign Bruno Guimaraes from the French outfit during the January window.

Arsenal were also understood to be interested in Guimaraes, and the report claims that Newcastle would be optimistic of beating the Gunners in another battle for Paqueta.

Any deal for the attacking midfielder, who can also play as a centre-forward, would likely break Newcastle's all-time transfer record.

Arsenal are in the market for attacking reinforcements themselves, with Alexandre Lacazette currently set to leave the club on a free transfer at the end of this season.

Uncertainty also surrounds the futures of Eddie Nketiah, Folarin Balogun and Nicolas Pepe, leading to speculation that Mikel Arteta could undergo an attacking overhaul when the window reopens.

Lyon are not expected to lower their demands for Paqueta as he still has three years remaining on his contract at the club.

Paqueta joined Lyon from AC Milan for £18m in September 2020 and has established himself as an important member of the team since then, scoring 19 goals and assisting 12 more in 72 appearances.

The 31-time capped Brazilian has scored nine goals and created six more in 38 outings across all competitions this season, despite Lyon sitting in mid-table in Ligue 1.

Paqueta is expected to be part of Brazil's squad for the World Cup in Qatar this winter.