Lyon give up on Anelka

This leaves the coast clear for Valencia and Arsenal to step up their chase of Anelka while Manchester City boss Sven-Goran Eriksson could turn his attention to Swede Elmander.

Lyon are desperate for a striker following injuries to Fred and Milan Baros and have cash to spend after the sales of Eric Abidal and Florent Malouda. But they will not be held to ransom for either of their top two targets.

"Anelka? This transfer is complicated to achieve," Lyon boss Alain Perrin told RL. "Regarding Elmander, the financial demands are excessive.

"We are not in a position to do this."

Anelka has only spent one season at Bolton but is thought to be disappointed at the exit of boss Sam Allardyce but will only be sold - and will only move - to a side who can offer Champions League football. It is also unsure if he would want to play in his native France again at this stage of his career. Arsenal have cash to spend and an attacking vacancy following the sale of Thierry Henry to Barcelona.

Valencia, meanwhile, want a top-class partner for David Villa, having become over-reliant on the Spain striker.

Elmander scored 11 Ligue 1 goals in his first season in France, helping fire Toulouse to third place and a Champions League qualifier slot.