Cole on his way to Chelsea as Arsenal accept Gallas and £5m

Chelsea were last night still yet to announce the signing of Ashley Cole despite having agreed a deal with Arsenal which would see their London rivals receive £5m and the defender William Gallas after a remarkable 19-month pursuit of the player by Jose Mourinho.

At 12.40am, with the transfer window shut, a proposed joint statement from the two clubs had not yet been released. Having once been prepared to pay £20m for Cole, Chelsea feel that the deal, which sees them get rid of the unsettled Gallas, to be in their favour. Arsenal will believe that they had little option but to sell.

Cole, 25, was still with the England squad last night although Chelsea were discussing personal terms with his advisers with a view to pushing the deal through before the deadline.

There were arrangements for the England left-back to take a medical in Manchester yesterday although it was not clear whether that went ahead following an early evening training session with Steve McClaren's squad.

Gallas, 28, is with the France squad preparing for their first Euro 2008 qualifier against Georgia and it will be his wage demands that are likely to cause the greatest problems in getting the deal completed.

The defender, in the last year of his contract at Chelsea, was originally offered £70,000 a week to stay at the club but demanded closer to £5m a year and it is unlikely that he will command that from Arsenal.

In the meantime, Arsenal have completed the signing of the midfielder Julio Baptista from Real Madrid who they missed out on signing one year ago when he joined Real from Seville. The Brazilian, who had such a disappointing year at Madrid, was a target for Tottenham but he has come on a loan deal to Arsenal in exchange for Jose Antonio Reyes ­ both are expected to officially become permanent after a year.

Arsenal had been linked with Nigel Reo-Coker in the last week of the transfer window and it is understood that there was some interest from Arsène Wenger, but it seems that Baptista will fulfil that role rather than the West Ham captain. Arsenal have emerged from August more than a little bruised but their parting of the ways with Cole has long been regarded as inevitable.

The rift goes back to Cole's disillusionment with Arsenal vice-chairman David Dein who he claimed had promised him a new deal on the back of his impressive Euro 2004 performances. When that deal failed to materialise to Cole's satisfaction, he eventually agreed to his infamous meeting with Chelsea chief executive Peter Kenyon and Jose Mourinho at the Royal Park Hotel on 27 January last year.

A newspaper's disclosure of that meeting eventually forced Dein and Arsenal to report Chelsea and Cole to the Premier League. In August that year an independent commission fined Cole £100,000, Chelsea were hit for £300,000 and Mourinho for £200,000 for their part in the saga. While Mourinho and Cole's fines were reduced on appeal, Arsenal's rift with Chelsea and Cole deepened over the episode. Cole's unhappiness was also deepened by his view that Arsenal's decision to report him to the Premier League caused him to be punished. He gave an interview in which he accused Dein of "forcing" him out.

However, he later signed a new contract with the club on the understanding that he would be able to leave should Arsenal receive a bid of £16m. In the negotiations this summer, Arsenal rejected bids of £16m and then £20m from Chelsea who became increasingly desperate to secure the player.

In the meantime, Gallas failed to turn up for their pre-season tour of America and was told by Mourinho that he had betrayed his team. The Frenchman had long planned to leave Chelsea but the match-fixing scandal in Italy scuppered a move to Serie A.

Chelsea are privately delighted they have moved on Gallas and believe the details of his behaviour as he agitated to leave will emerge in the next few weeks. One of the casualties of the transfer is Cole's autobiography My Defence which may now have to be changed.