Wenger's transfer kitty is slashed

Although Arsenal are poised to sign two players this month, Edelman told Wenger a week ago that transfer spending should be limited to £25million.

That budget includes money set aside to try to retain the likes of Alexander Hleb, who has an offer from Inter Milan, and Mathieu Flamini, who is almost certain to join AC Milan next week.

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And despite Edelman's abrupt departure after falling out with Arsenal director Danny Fiszman, Wenger will still only be able to bring in three or four players during the close season.

While Fiszman, now the major driving force at Arsenal alongside acting chief executive Ken Friar, is understood to share Wenger's desire to build the club, the anticipated transfer windfall from the Emirates Stadium will not materialise this summer because of a slowdown in cashflow from Arsenal's property business due to the global credit crunch.

Wenger, whose side face Everton today, is looking to strengthen defensively and in midfield. After Arsenal's exit in the Champions League quarter-final against Liverpool, Wenger decided that his young team were not good enough to compete with Chelsea and Manchester United and he was intent on securing major signings.

But Edelman then surprised the manager by saying the transfer budget had to be cut back because of the slowdown in the property market, which is expected to affect the sales of flats both at the club's former Highbury ground and in the new developments at the Emirates Stadium.

Wenger always had a tense relationship with Edelman, who was a money man with little background in football and was disliked by many at the club because of his cost-cutting.

The Arsenal Supporters' Trust, which represents about three per cent of the club's shareholding, has published an analysis of the club's most recent financial results that predicted about £25m would be available at the end of the season.

That figure is roughly correct, but was also intended to cover contract renewals for Hleb and Flamini, who Wenger is still desperate to keep at the club.

"We will be meeting with Ken Friar in a week's time and top of our agenda will be the financial state of the club in light of the slowdown in the property market," said a spokesman for the Trust.

Flamini, currently injured, could have played his last game for Arsenal, having agreed a deal with AC Milan. Wenger has set tomorrow as the deadline for Flamini to make a decision on his £50,000-a-week offer from Arsenal.

The central midfielder would be replaced and a centre-half is also high in Arsenal's priorities, after Philippe Senderos' poor displays in the Champions League quarterfinal and the erratic behaviour of captain William Gallas.

Theo Walcott should replace Emmanuel Eboue as first choice at right midfield while midfielder Carlos Vela, the 19-year-old Mexican on loan at Osasuna, will come into the first-team squad.