Larsson is out of contract next summer and will be free to talk to European clubs next month.

Blues have so far failed to reach agreement with the former Arsenal player over a new deal.

McLeish said: "Yes, we want to keep Seb. He's certainly been one of the stars performance-wise this season.

"I think he's taken his game to a new level. Whether that's because his contract is nearly out I don't know.

"Sometimes you see that with players in the last year of their contract.

"Seb is an international now and is a regular in the Sweden team, whereas maybe he was a bit part player over the last couple of seasons.

"Maybe that was because he wasn't on top form the last couple of season, but he certainly is now.

"He is one of the first picks in our team and it's up to every player to maintain that kind of level."

McLeish added: "Seb can only talk to European clubs. He can't talk to anybody in the UK but we're not daft and we know how football works.

"He's certainly free to talk to foreign clubs in January.

"It's a concern because, if we've not done anything about it, then Seb has decisions to make."

McLeish also has to sort out the future of striker Garry O'Connor whose six-month contract, signed last summer, ends this month.

The Scotland international is currently on loan to Barnsley for a second temporary spell this season.

He was only offered a short term deal at Blues after undergoing surgery on both hips in the past 12 months.

McLeish said: "I'm meeting with the board. That will be one of the subjects on the agenda."