Arsenal have capitalised on Southampton's financial problems to save themselves almost £3million on the Theo Walcott deal.

The striker signed for a fee worth up to £12m in January 2006, with £5m paid up front and the remainder in installments based on the number of appearances at club and international level.

Southampton have received another £2m but with the Championship club reportedly in need of funds they are believed to have agreed a deal with Arsenal that will see them paid £1.6m now with a final payment of another £500,000 later in the year.

It means the total cost for the 19-year-old, who has scored just six goals since moving to Arsenal, will be £9.1m.

The agreement shows just how much confidence Arsenal, who refused to comment, have in Walcott progressing into a regular in the first team at Emirates Stadium as well as a consistent member of the England squad.

Meanwhile, former chairman Rupert Lowe has forced an extraordinary general meeting at Southampton. The EGM is likely to trigger his return to the boardroom at the St Mary's Stadium, just two years after he left his post as chairman.

The move will anger some fans, who still blame him for the club's relegation from the Premier League.