Arsenal are one of several Premier League clubs considering launching a bid for Santos playmaker Ganso.
A number of English clubs have been monitoring the 22-year-old for some time, with Chelsea, Manchester United, and Tottenham all known to have been showing interest.
But last week it emerged that Arsenal were also keen on the Brazil international, who is in England for the London 2012 Olympics, and according to ESPN, the Gunners could make a move for the midfielder, who looks set to leave Santos this summer.
A club source was quoted as saying: "Arsenal are interested, yes, but there are others.
"He has a €50million buyout clause in his contract but Santos will take less, much less - not a fee that will be prohibitive to a deal in England."
It is believed Santos could be prepared to sell for around €20m.
Santos vice-president Odilio Rodrigues last week admitted the midfielder, who recently rejected a new contract, does not want to play for the Brazilian outfit anymore, and confirmed the club will not block a potential move should clubs firm up their interest over the summer.
Whether Chelsea and United are still keen remains to be seen, as they have been linked with a number of alternative midfield options in recent weeks.
Porto have also shown interest in the player, while the Gunners could face competition from Brazilian side Internacional, who are expected to make a move should Oscar dos Santos Emboaba Junio complete a £25million move to Chelsea this summer.