Blues may have to outbid City for Bolton star Anelka

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They have turned down an £11million offer from the Stamford Bridge club and want £4m more.

Chelsea may face competition from the striker's former club City, whose manager Sven-Goran Eriksson is an admirer of the France striker, while Portsmouth could also enter the fray.

Bolton are resigned to selling Anelka after he repeatedly expressed his desire to join a bigger club, but they have him tied to a long contract so are in a strong position.

They are determined to make a big profit on the 28-year-old they signed from Fenerbahce for £8m in August 2006 and are aware of Chelsea's urgent need for the former Arsenal and Real Madrid player.

Avram Grant's side are short of fit centre-forwards with Didier Drogba and Salomon Kalou away preparing for the African Nations' Cup and Andriy Shevchenko struggling with injury. Talks are continuing today despite Bolton's initial firm stance and a compromise could be reached in the next few days if no other official bids are made.

Grant has insisted his club will not be held to ransom but knows that owner Roman Abramovich is ready to release funds to keep their push for trophies alive.