Chelsea confirmed Ashley Cole's proposed transfer from Arsenal is under threat because the two clubs cannot agree a fee. The two London clubs reached a stand-off yesterday in their discussions about Cole's transfer.

The sides are millions of pounds apart in their valuation of the England left back.

Chelsea released a statement on the Cole transfer during their 1-1 draw against Celtic at Stamford Bridge last night. It read: "Chelsea FC has been in discussions with Arsenal Football Club for some time over the possible transfer of Ashley Cole.

"Chelsea has made a very substantial offer for the player.

"Although discussions have continued, Arsenal's valuation of the player does not match Chelsea's and therefore no agreement can be reached in the current circumstances."

The Premiership champions insist the price named by Arsenal is far too high for Cole and refuse to be held to ransom.

Earlier this week, manager Jose Mourinho threatened to divert his search for a left back elsewhere if Arsenal did not lower their asking price.

Arsenal manager Arsene Wenger said he wanted the deal sorted out as quickly as possible, one way or the other.

The whole saga dates back to last year, when Chelsea were caught talking to the player without Arsenal's consent.

Arsenal are thought to be holding out for a fee of more than £25 million for the player, who came through their youth ranks to become an England regular.

Chelsea are unwilling to up the offer on the table, thought to be in the region of £16 million.

There are no other clubs in the market for Cole, who did not play in Arsenal's Champions League qualifier against Dinamo Zagreb this week.

He is not yet cup-tied for the European season and this keeps his value higher.

Mourinho confirmed in his programme notes for last night's friendly that Joe Cole's knee injury was not as bad as first feared and he hoped to have him back soon.

Meanwhile, Jose Antonio Reyes is desperate to see his prospective move from Arsenal to Real Madrid wrapped up "as soon as possible".

The Spain forward was left out of Arsenal's line-up for their game against Dinamo Zagreb on Tuesday, fuelling speculation he is close to completing his switch to the Bernabeu. If he had taken any part in the game, Reyes would have been ineligible to play for another side in Europe this season.

The 22-year-old now hopes Arsenal and Real can come to an arrangement regarding his transfer to the Spanish capital.

"Me and my family are somewhat tense at the moment and want to make sure things don't collapse," he told the Spanish daily AS. "But I'm optimistic things will work out well.

"I want things to be sorted out as soon as possible and I will have my mobile turned on all day on Wednesday in case there are any important calls."

Should Reyes be allowed to leave, then Arsenal are likely to make a firm move for French World Cup midfielder Franck Ribery - although Wenger was at pains to stress that a bid had not already been tabled.