ARSENAL are facing intense competition for the signature of teenage Brazilian forward Luighi, who has been on the Gunners’ radar for over a year.

Inter Milan and Borussia Dortmund are stepping up their interest in the Palmeiras starlet after he extended his contract with the Sao Paulo-based club this week.

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Luighi’s new deal now runs until 2029 with an updated release clause of over £70million, but European clubs have been able to negotiate lower sale prices with Palmeiras in the past.

Chelsea-bound Estevao, one of the players keeping Luighi out of the club’s starting line-up, had a £60m clause before the Blues agreed a £28m deal to take him to Stamford Bridge.

Estevao’s summer switch to London should lead to more first-team opportunities for Luighi, which could be the key to him qualifying for a UK work permit.

The teenager caught Arsenal’s eye with a couple of goals for Brazil at the Under-17 World Cup in 2023.

The 19-year-old played a starring role in Palmeiras’ run to the final of the Under-20 Copa Libertadores earlier this year and appears to be on the brink of a first-team breakthrough.

Reports of the Gunners’ interest emerged in October when Joao Freire of Nosso Palmeiras described him as a player with “an eye for goal and an ability to create space where none seems to exist.”

Luighi’s talents — chiefly his athleticism, fluid movement and close control — are well-suited to the fast-paced demands of European football and he has a similar dribbling style to Wolves star Matheus Cunha.

Palmeiras’ reputation as Brazilian football’s top talent factory that launched the careers of Estavao, West Ham’s Luiz Guilherme, Manchester City’s Vitor Reis and Arsenal’s own Gabriel Jesus adds to the belief that Luighi is destined for the top.

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Fellow Champions League semi-finalists Inter were alerted to Luighi’s talent last year when an Italian agent based in Brazil recommended him to the club.

And Borussia Dortmund are also showing serious interest as they look for potential replacements for Premier League-linked left-winger Jamie Bynoe-Gittens

It comes after Arsenal’s Champions League victims Real Madrid scouted Endrick from Palmeiras in 2022.