Mark Viduka looks to be on his way out of the Riverside Stadium having agreed in principle to join derby rivals Newcastle.

The 31-year-old Australian is expected to hold talks with the Tyneside club tomorrow before heading off on international duty after rejecting the offer of a contract extension at the Riverside Stadium.

Boro are yet to publicly admit defeat in their efforts to retain the services of their leading scorer, but with Malcolm Christie and Danny Graham having been released and speculation continuing over £7.5million Nigeria international Ayegbeni Yakubu, the pressure is firmly on Southgate.

The 36-year-old pulled off a major coup when he persuaded England defender Jonathan Woodgate to make his loan signing from Real Madrid a permanent deal, investing £7million in the process.

However, with Viduka having supplied 19 of his side's goals last season, there is little doubt where the focus now lies.

Southgate is a long-term admirer of Arsenal's Jeremie Aliadiere, and it is understood the two clubs have agreed a fee for the Frenchman, who is currently on holiday.

The Boro boss, who has been linked with Brazilian teenager Kerlon and Levante winger Mustapha Riga, has also been monitoring West Brom frontman Diomansy Kamara's situation following his side's Coca-Cola Championship play-off final disappointment.

The Senegal international could be available for around £4million, although Southgate's summer budget is far from extensive and he has other needs.

A right-back is a priority after the departures of Abel Xavier and Stuart Parnaby, while the right side of midfield has been a long-standing concern.

However, while having a contingency plan in place, Southgate was hoping to hang on to the out-of-contract Viduka and his impending departure on a free transfer would have major financial implications.

Boro have insisted Yakubu, reportedly a target for former club Portsmouth, is going nowhere, while they have hopes for January recruit Dong-Gook Lee.

However, even that would leave them short in attack and Southgate has admitted he may have to be prepared to sell members of his current squad to fund his summer dealings.