Arsenal and Manchester United are locked in a battle to sign highly-rated midfielder Miguel Veloso in January.

Veloso, a product of the famed Sporting Lisbon youth academy has been on the radar of some of Europe's biggest clubs for the past year.

The Portugal international's agent now claims that both heavyweights are preparing to lodge bids for the player, who is rated to be in the US$32 million bracket.

Veloso was mooted to be a summer target of Tottenham during the last transfer market but no move materialized.

Now, it looks likely that Arsene Wenger and Sir Alex Ferguson will go head-to-head to secure the player's signature.

Barbosa told the News of the World: "Arsenal want Veloso for the future and a deal could be done in the January window.

"But United are also watching the situation very closely."