Manchester City are working on a deal that could bring midfielder Ilkay Gundogan back to the club.

The 33-year-old left City for Barcelona in 2023 on a free transfer when his contract expired after captaining Pep Guardiola's side to their historic Treble.

However, the Catalan giants' well publicised financial issues have prevented them from registering new signing Dani Olmo and releasing one of their higher earners would smooth that process.

City are wrestling with early personnel issues that include the £81m departure of Argentina forward Julian Alvarez to Atletico Madrid and an injury to Norwegian winger Oscar Bobb that could keep him out for four months.

Gundogan could provide a short-term answer to these problems and would not require a settling in period.

Manager Pep Guardiola did not want Gundogan to leave City last year, but the club were unwilling to offer the German midfielder the contract length he wanted.

After joining City from Borussia Dortmund for a reported £20m in 2016, Gundogan made 304 appearances for the club, scoring 60 goals.

During seven years at Etihad Stadium he won 14 trophies - five Premier League titles, one Champions League, two FA Cups, four Carabao Cups and two Community Shields.

Why are Barca having trouble registering players?

In 2013, La Liga clubs agreed to specific economic rules aimed at guaranteeing the sustainability of the competition.

It means that all clubs have a limit on player expenditure, essentially not being able to spend more on the playing squad than they earn in a season.

This is known as their 'squad cost limit' and is calculated by deducting a club's projected non-sporting expenses, such as salaries and agent fees, and outstanding payments owed to other clubs, from their expected revenues for the season.

Clubs submit their financial information to La Liga, which reviews the documentation and checks revenues are calculated at market values – meaning they do not include inflated sponsorship deals, for example.

If, however, a club's squad cost limit is set lower than their total wage bill, not all players in the squad can be registered to play in La Liga.

Barcelona are reportedly currently unable to register new signing Olmo because they do not have the required capacity within their spending limit, hence the need to sell players to make room.