Leicester manager Martin O'Neill has persuaded Emile Heskey to stay at Filbert Street. The England under-21 striker is set to sign a deal that will keep him at City until the summer of 2000.

Heskey's earnings will immediately rise to around £10,000 a week, breaking the club's wage ceiling of £7,000 a week which O'Neill has spent 18 months trying to raise.

Southampton are interested in the versatile Newcastle United player Steve Watson. Saints manager Dave Jones is anxious to strengthen his squad in the wake of his side's fourth consecutive defeat at Leeds on Tuesday.

However, Newcastle's manager Ruud Gullit is likely to demand £5 million for a player Jones rates at £2.75 million.

Aston Villa manager John Gregory is chasing the Swedish midfielder Frederick Ljunberg, who impressed in the 2-1 win against England. Barcelona are also interested in the Halmstadt player, but Gregory plans a £2 million offer before the Spanish transfer window reopens in December.

Everton will apply for a work permit for Ibrahim Bakayoko and must persuade the British Government that the Ivory Coast is a top-ranking football nation.

The Merseysiders want to pay French club Montpellier £4.5 million for the 21-year-old striker and link him with Duncan Ferguson.

Bakayoko would have to meet a variety of Home Office criteria to be awarded a permit - including playing in the majority of his country's matches over the last year.