Reds boss Kenny Dalglish is determined to land the England winger, but no deal has yet been agreed because Aston Villa have put a £20 million price tag on the player.
The lack of progress in Downing's expected move to Anfield has left the door open for bids from other clubs and it appears Arsenal are ready to take advantage of the situation.
Gunners boss Arsene Wenger is prepared to match Villa's asking price in order to get his man, reports the Sunday Mirror.
Wenger is determined to add a creative player to his squad before the new season gets underway, as he is facing the prospect of losing Cesc Fabregas to Barcelona and possibly also seeing Samir Nasri leave.
Downing does not enjoy the same standing in the game as Fabregas and Nasri, but the 26-year-old is a proven Premier League performer who would need little time to adapt.
Arsenal are also targeting another player with experience in the English top-flight, Bolton defender Gary Cahill, but Wenger has not abandoned his policy of searching for the pick of the rising overseas stars.
He is close to finalising a deal to sign Ivory Coast forward Gervinho from Lille and has also made a bid for Velez Sarsfield midfielder Ricardo Alvarez, although Inter Milan are reported to have topped that offer
Source: Metro.co.uk
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