Manager Arsene Wenger revealed Theo Walcott's protracted contract saga could finally come to an end this weekend.

However the Arsenal boss is prepared to go to the wire in his quest to land new talent over the course of the January transfer window.

Walcott, 23, is set to close out terms on a lucrative extension which would make the England forward among the highest-paid players at the club with a three-and-half-year contract worth around £100,000-a-week, boosted by lucrative add-ons.

Arsenal may have been linked with a string of players across Europe - Napoli's Uruguay hitman Edinson Cavani the latest potential big-name signing - but Wenger remains happy to wait.

"The prices go always up at the start of the transfer market and go down in the last week. Sometimes as well they go up in the last week, but it depends," said Wenger.

"Most of the time they go down in the last week and you know as well that 90% of transfer activity happens in the last week if not in the last 48 hours."

"Our banker lives just next to me at the moment and he is ready if we find the right player," Arsene Wenger insisted.

Arsenal have plenty of cash reserves, bolstered by the £24million summer sale of Robin van Persie to Manchester United.

Wenger maintains the Gunners are ready to spend big should they find the right man.

Cavani would certainly fit the bill, although it remains to be seen whether there is any serious interest from Arsenal.

"I like him as a player," said Wenger.

"Will he cost a lot of money? That's for sure. Nobody would deny that.

"Our banker lives just next to me at the moment and he is ready if we find the right player."

Wenger did, though, confirm Crystal Palace's promising England international Wilfried Zaha was on his radar.

However, the Arsenal manager insisted no formal offer had yet been lodged for the 20-year-old, who is also being watched by Manchester United.

"We are looking at him, but at the moment we have not made any bid for him," Wenger said.

"I don't know if Manchester United are in for him.

"Anyway, if you call any club for any player, they will tell you Man Utd, Milan, Real Madrid are as well in for him, but it is always difficult to know if it is true or not."

While the ink is far from being dry on Walcott's bumper new contract, Wenger admits the recent positive dialogue has come as welcome relief.

"I was scared at some stage, yes, that he could leave because it is like that with the experience I have in negotiations," Wenger said.

"When things last too long, it is never a good sign.

"In that case, it took us some time to get where we want to get.

"It is still not finalised, but hopefully it will be done by this weekend.

"There is a possibility. My optimism is at 99% now."

Wenger is determined to get his side firing again in the Premier League following last weekend's disappointing 2-0 home defeat by Manchester City.

"We failed to capitalise on the potential big game. We go into a period now where that will be very important," said Wenger.

"At Chelsea is another opportunity, and it is important for the team that we know we can win these games."

Centre-back Laurent Koscielny will be available again after being suspended for the Swansea cup tie after his red card against City. Wenger, though, confirmed this morning that midfield duo Mikel Arteta and Tomas Rosicky remained sidelined by their respective calf problems.