And Wenger insists that signing the young gun to a long-term deal will have a positive effect on the entire squad.

Contract talks had reached a stalemate late last year, before a breakthrough was made in November as Walcott lowered his wage demands.

The attacker's contract expires in the summer, leaving him subject to interest from a number of Premier League rivals.

Yet Wenger has remained defiant, even with the threat that the former Southampton forward could leave on a free transfer at the end of the season.

"I'm convinced it will have a positive effect on the rest of the team if we sign him," Wenger told reporters on Thursday. "We want to keep him here.

"Our priority is to keep players at the club. We have rebuilt a team and we have to show that we can be consistent now."

Wenger also confirmed that Johan Djourou and Sebastien Squillaci could be leaving the Emirates Stadium this month.

"If Squillaci finds a club, he might go. Djourou might go as well," he said.