But manager Steve Bruce still looks like losing out in his bid to sign the Australian international, who is available on a free transfer from Middlesbrough, with Newcastle remaining favourites to sign him.

Blues are willing to offer the 31-year-old striker a £60,000-a-week package as they recognise the need to bring in extra firepower following the return of the on-loan Nicklas Bendtner to Arsenal.

As things stand Cameron Jerome, DJ Campbell and Mikael Forssell are Bruce's striking options, although Gary McSheffrey could move from the left flank into the centre.

Viduka scored 19 goals for Boro last season and Bruce knows Birmingham need a proven marksman if they are to have a realistic chance of surviving in the Barclays Premiership after gaining promotion.

It was a lack of goals which cost City their top-flight status 12 months ago when Emile Heskey managed just four goals during the 2005-06 season before moving to Wigan.

The only time they scored freely during their four-year tenure in the Premiership was when Forssell scored 19 goals when on loan from Chelsea in 2003-04.

Birmingham were also interested in signing central defender Titus Bramble from Newcastle before he opted to join Wigan on a three-year contract.

Bruce has so far signed Middlesbrough utility player Stuart Parnaby on a Bosman transfer and made permanent the capture of midfielder Fabrice Muamba from Arsenal after he spent last season on loan from the Gunners.