Cesc Fabregas is not interested in a move to Real Madrid and wants to stay at Arsenal, according to his agent.
Fabregas (left) and Walcott both plan to play at Arsenal next season
"We have one very good offer from Madrid but Cesc and Arsenal prefer he plays in London," Joseba Diaz told BBC Radio Five Live.
"Cesc prefers playing at Arsenal next season and I think a lot of seasons."
Meanwhile, Theo Walcott's agent says Arsenal are not planning to send the 17-year-old striker out on loan to gain first-team experience.
The England World Cup squad member has been linked with a stint at West Brom as part of a deal for Arsenal to sign Curtis Davies.
But Walcott's agent Warwick Horton told the Daily Express: "I am in regular touch with Arsenal and there has never once been a suggestion of Theo going out on loan.
"He has learnt an awful lot since joining the club and was delighted Thierry Henry signed a new contract because he loves working with him in training.
"He is looking forward to starting the new season at the new Emirates Stadium and there is no reason why that won't happen."
Arsenal have also firmly denied that Fabregas could leave the club.
Manager Arsene Wenger said: "I'd like to make it clear that Cesc Fabregas is not for sale and we will not be listening to any offers.
"He represents the future of Arsenal and we are looking forward to him being a major part of our plans."