Sturridge set for Chelsea switch

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The two clubs have failed to reach an agreement on a suitable compensation package but as the player is under 24, he is not available to sign on a Bosman-style free transfer.

The 19-year-old's contract expires at the end of the summer and City are looking to get a 'development fee' of around £10 million from Chelsea.

Chelsea's valuation of the teenager is thought to be somewhat lower at an estimated £3 million.

City rejected Chelsea's initial package and it is now likely that a settlement of around £5 million will be agreed which will include a number of add-on clauses related to performance and appearances.

Sturridge is one of the game's top prospects and highly rated by City boss Mark Hughes.

But the player is understood to have staggered City by demanding a contract worth a reported £55,000-a-week.

Sturridge was approached by Chelsea's Sporting Director, Frank Arnesen, who had been monitoring the player's progress for three years.

Sturridge made 16 league appearances for City last season and scored four goals.