Birmingham are closing in on signing Everton striker James McFadden.

Birmingham have had bids of €3.2million and €3.9m rejected for the Scotland international but it is understood further negotiations have brought the two clubs close to reaching an agreement.

Everton value McFadden, who has struggled to hold down a regular place this season, at around €6.6m.

If he moves to St Andrews it will mean him being reunited with former Scotland manager and current Blues boss Alex McLeish who had made the player one of his main targets during the January transfer window.

McFadden will also link up again with Scotland striker Garry O'Connor who moved to Blues from Lokomotiv Moscow in a €3.5m deal last summer.

A source close to Birmingham said: "The two clubs have moved closer to reaching an agreement and something could be done by the weekend. You wouldn't be far wrong in saying that."

O'Connor said: "James McFadden is an unbelievable talent. If we could manage to lure him to Birmingham then he would be a fantastic signing.

"He has worked for the gaffer before and to get him here would be great because he's top class.

"If he came here he would score goals, as he has already done in the Premier League, and at national level, and he would be a great success and help the team.

McLeish has confirmed his interest in McFadden, who shot to prominence after scoring the goal which earned Scotland a shock win over France in Paris in a Euro 2008 qualifier.

It is understood agreement has also been reached with Hibernian for left-back David Murphy although Wigan and Bolton are also in the hunt for the player.