The Gunners are unwilling to meet Atletico's £45million release clause to put the transfer in jeopardy.
It is claimed that the Gunners are only willing to pay €25m alongside including one of their players in a part-exchange deal, but Atleti will not be drawn into any negotiations and will only sell if the midfielder’s £45 million release clause is activated.
The North London club has intensified their interest in the Ghana international, who is keen to switch to England.
But the two clubs have failed to reach an agreement, just yet as they haggle over his release clause.
With Arsenal set to pay out over £200,000-a-week in wages to land the midfielder, the club is cautious about the monetary consideration involved.
Arsenal manager Mikel Arteta is in desperate need of midfield oxygen with Matteo Guendouzi banished from the squad and Dani Ceballos expected to head back to Real Madrid after his loan spell.
Partey, 27, has generally impressed for the Spanish side to alert a number of suitors for his signature.