Southampton boss George Burley believes striker Theo Walcott should stay at the club in spite of a reported £12million offer from Arsenal.

According to the BBC Arsene Wenger has followed up his interest in the 16-year-old with a firm bid. However Burley said: "At the moment he is in the best place and is doing tremendously. The best thing for his future is to stay here at Southampton.

"To have his talent at such a young age is tremendous."

It is reported Chelsea could be willing to pay up to £15million for the teenager, but that Walcott would prefer a move to Highbury.

Wenger had earlier given a clue that a deal was close when he said he had "two signings, sorry, two-and-a-half".

Asked if he was referring to Walcott, he said: "I would like to tell you."

Wenger has already signed Emmanuel Adebayor and Vasiriki Abou Diaby during the January transfer window.

Earlier in the week, Wenger admitted he was an admirer of Walcott.

"He is a player we rate," he said. "I rate him personally and we are looking at him, yes."