Man in demand: Defender Nowotny (CliveBrunskill/Allsport)

But the Premiership rivals could still end up in a bidding war for the 26-year-old centre half, who is expected to move next summer.

United inquired about Nowotny - believed to be the Bundesliga's highest earner on £40,000 a week - after England's 1- 0 defeat by Germany in October's farewell to Wembley.

An initial figure of £20 million was rejected by Leverkusen general manager Rainer Calmund, who issued a similar rebuttal when the £23 million offer was put on the table.

But Calmund had already turned down a staggering £24.5 million offer from Arsenal at the start of the season.

A source at Leverkusen confirmed the offers and said that Calmund, although publicly adamant that his club are not in the business of selling their best players, is privately resigned to the departure of his team captain.

The general manager, in Argentina scouting for new head coach Berti Vogts, knows that Nowotny has expressed a desire to experience football in one of Europe's main leagues - with the Premiership topping his wish list.

Both United and Arsenal are willing to pay the price to break Nowotny's contract, which runs until 2005.

An intelligent, quick and strong defender who reads the game well and uses the ball effectively, he could be the ideal partner for Jaap Stam or the perfect long-term replacement for Tony Adams.

United remain in need of a centre half, even allowing for the emergence of Wes Brown, and have been following the contract stalemate between Sol Campbell and Tottenham.

Moving for Nowotny could be a case of Sir Alex Ferguson hedging his bets, in the event that Campbell cannot be persuaded to leave his beloved London, or it may indicate that he has already given up on signing the England international.

Arsenal manager Arsene Wenger knows that replacing the ageing Adams - and eventually all of the famous Highbury back four - will require top-class recruitment and serious financial outlay.

United, meanwhile, are set to make England schoolboy Chris Hogg their third teenage buy from Third Division York City.

The 15-year-old attacking midfielder may soon follow goalkeeper Nick Culkin, 22, and winger Jonathan Greening, 21, who both left Bootham Crescent for Old Trafford, where they have already made appearances in the first-team squad.

York assistant manager Adie Shaw said: 'It's disappointing to face the prospect of losing your best young players, but United have gone about this fairly.