Birmingham City and Aston Villa are in talks about a Sebastian Larsson - Curtis Davies swap deal.

But if agreement cannot be reached, Blues are prepared to propose a straight £3.5 million transfer of the centre-half instead.

Blues are keen to strengthen their defensive options with Davies in the wake of Scott Dann's season-ending injury, as well as snare a striker.

Davies was due to re-sign for Leicester City on loan again until May, but Blues hijacked the deal.

Negotiations about sending Larsson and £1.5 million to Villa for Davies were mooted, with Blues also having the contingency plan of an offer solely for Davies.

Gerard Houllier was content to conclude his transfer business for the month with the Villa record £18 million signing of Darren Bent after splashing out £5 million-plus on Jean Makoun and bringing in Kyle Walker on loan.

But the possibility of snapping-up a player he tentatively inquired about, but didn't bid for, earlier in the window, as part of an exchange deal, has prompted him to revive interest in Larsson.

Houllier's close friend Arsene Wenger has given Larsson a glowing reference from their time together at Arsenal and Villa are attracted by the Sweden international's versatility to play on either wing, at right-back or in central midfield.

Snapping the 25-year-old up without paying a fee appeals to Villa who are comfortable with his age, wage demands and sell-on potential, while a permanent move for Davies, rather than a loan, also suits the claret and blues.