Theo Walcott wants to stay at Arsenal and is set for another round of talks on a new contract, Arsene Wenger confirmed, with the Gunners manager admitting he would have liked to have signed Eden Hazard.

Walcott has only one year remaining on his contract, similar to the situation that Robin Van Persie was in, but unlike the Dutchman, who chose to join Manchester United, Walcott has made it clear he wants to stay, with Wenger admitting an agreement is in the works.

"Negotiations continue. At the moment not directly with me, but we try to sort it out one way or the other," Wenger told reporters.

"We want to extend his contract and keep him at the club ­-- but you need not only our desire. His desire is also right, he wants to stay and we need to find an agreement."

Arsenal are reportedly offering Walcott a five-year contract worth £70,000 a week ($110,600), with the Arsenal hierarchy increasingly confident the 23-year-old will agree to the deal.

Wenger also explained his decision not to sign Nuri Sahin from Real Madrid. The midfielder was reportedly on his way to the Gunners, but a last-minute hitch saw the talented playmaker move to Liverpool; although the move still hasn't been confirmed, it is expected the Reds will sign the former Borussia Dortmund man by this weekend on a season-long loan.

"We have (Jack) Wilshere coming back quicker and he is a similar type of player," Wenger said. "I see Sahin more in the attacking department, not in a deep midfield role.

"If you look at the numbers you will see that Song was more of an offensive player than a defensive midfielder. Arteta can play deeper -- the kind of Pirlo role -- and we have Diaby who is a very strong defensive player.

"We have Coquelin who is also doing very well. I've played many games with Diaby and Wilshere (in midfield) and they were very efficient."

Wenger, however, admitted if a top-class player with true defensive qualities in midfield became available, he would have no hesitation in going back into the transfer market. "If someone really top, top class comes up... I do not need to buy an average midfielder," Wenger added. "If someone top, top class turns up, completely defensive, we will consider it.

"My approach is that we have a very strong squad but if one or two opportunities arise we will take it. We will only take players who have something special. We believe we have a very strong team and if we find the special player, we will do it."

Wenger said Wilshere was on course for a comeback in October. "October will be an important month for Jack," the Arsenal manager said.

"I will promise you that I will be careful, but Jack works very hard.

"Every day he is in early, late going home, is focused and has built up a good basis for his body.

"After how quick he will be sharp again for competition, I don't know. We will have to wait for at least a month to see that."

The Frenchman admitted he was sorry to have missed out on the signing of Hazard, who chose to join Chelsea, with Manchester United and Manchester City also losing out. "The one player I would like to have signed? Eden Hazard," Wenger admitted.

"We would have considered him, yes, because we were on the case a long time but there was such a competition for him.

"Manchester City and Chelsea, they fly a bit higher in the sky.

"We tried to sign him two years ago, we were in touch with Lille but they never wanted to sell him. They had a clause and they decided only this year to sell. He was a very young boy, he is still a very young boy.

"He is a guy who has something special, as you have seen already."