Last Updated: Wed, 14 May 2008 15:14
Arsenal are eying a move for Mauro Zarate who will not be signing for Birmingham after relegation from the top flight.
The former Racing Club striker said his goodbyes to Blues team-mates and staff last night and headed off home to Argentina.
City had been in negotiations with Zarate's agents for several weeks and had they avoided the drop, were confident that a season-long loan arrangement for next season could have been completed.
But rival Premier League clubs are now looking at the 21-year-old, and Arsenal are reported to have expressed an interest.
His club, Al-Sadd of Qatar, wanted around £20million for his permanent signing, which makes a Carlos Tevez-style loan deal more likely.
"Mauro's going to be an attractive proposition to Premier League clubs, in fact I know he is," said Blues boss Alex McLeish.
"I would like to thank him for his spell here, and he made an impact, which was never going to be easy.
"It was a little bit of a risk bringing him in from a league where you can get away with things, be lazy and still look like a world class star, coming into the hurly-burly of the Premier League.
"So I applaud his spirit, his heart and he will be a good asset to one of the big clubs, if not here then abroad.
"I said, at times, if he went into a team a little bit technically more proficient than us - and I meant that with no disrespect to our boys - he would be even better.
"He's a real talent and it's just a shame that our situation counted against us."