By Wayne Veysey | UK correspondent
An Arsenal delegation led by transfer negotiator Richard Law was in Madrid last week to begin negotiations with Real chiefs.
Granero, a former Madrid youth-team player who returned to the club last year following a three-year spell at Getafe, has been earmarked by Arsene Wenger as a New Year signing.
The Arsenal manager is without Jack Wilshere for at least another four months and believes midfielder Granero can help take some of the creative burden off the likes of Mikel Arteta and Aaron Ramsey.
However, Goal.com understands that Arsenal face a fight to convince the 24-year-old to move to the Premier League rather than stay in Spain, where he has also reportedly attracted interest from big-spending Malaga.
Los Blancos value Granero at around £6 million (€7m) but are hopeful that a bidding war could raise his price beyond that.
The Spanish club told Arsenal they would prefer to keep Granero until the end of the season, even though he has featured only intermittently during Jose Mourinho’s reign at the Bernabeu.
The former Spain Under-21 international played in 32 matches for Madrid last season, mainly as a substitute, and has been sidelined even further in the current campaign, playing just seven minutes for the first team in two substitute appearances.
Arsenal, who have also earmarked £25m-rated (€29m) Rennes midfielder Yann M’Vila as a January target, will rotate Arteta, Ramsey and Alex Song with rookies Emmanuel Frimpong and Francis Coquelin and veteran Tomas Rosicky in the three central midfield berths between now and the winter window.
But Goal.com understands that Wenger is privately concerned about how much of an impact Wilshere will have this season as the manager attempts to end the club’s six-year trophy drought.
Even if Wilshere’s recovery from ankle surgery last month goes smoothly and it corresponds to the 22-week schedule mapped out by the club’s medical department, by the time the teenager returns to the team in late February or early March, he will have been out for seven months in total.