Saints have offered teenage star Gareth Bale a new contract in a bid to keep him at St Mary's.

The Daily Echo understands that the 17-year-old has been offered a one-year extension to his current deal which is due to expire in 18 months time.

The club have already turned down two bids for the Welsh international left back, one from Tottenham which is far less than the £5m cash offer reported elsewhere and another substantial offer from an unnamed Premiership side, thought to be Manchester United.

However, if Bale turns down the offer of a new deal, Saints could be forced to sell this month.

Bale is currently valued at about £7-8m but if he rejects the new contract, that would tie him to the club until the summer of 2009, Saints would need to sell this month to reach that valuation.

It is estimated that if his current deal ran down another six months until the end of this season, then his value would drop by about 60 per cent and be around the £5m region.

The fear is that Bale may wish to wait until the summer, when he will know if Saints have achieved promotion or not, before committing his future either way.

But by that stage not only will his value have dropped, the club will face the prospect of losing him for a tribunal fee - which probably wouldn't be more than £250,000 - in another 12 months time.

A source close to the club told the Echo: "In the belief that Gareth wants to stay at Southampton and sees his immediate future there - at least the next 18 months he is contracted to, whether the club achieves promotion or not - Saints have offered him a one year contract extension so he's not effectively ticking down his contract and could then leave for virtually nothing.

"The contract offer is very generous and the club have already turned down offers for Gareth and don't intend arguing for more money as they want to keep Gareth.

"Saints think Gareth and his parents are happy with his progress at the club but are concerned as to what his agents may advise, but they hope to have it all settled by the end of next week."

Bale's agents who will advise him on the deal is the Stellar Group, headed by Jonathan Barnett who is currently banned from acting in transfer deals for his part in the Ashley Cole tapping up affair.

The man who is handling Bale currently is David Manasseh, who managed Wayne Bridge's £7m move from Saints to Chelsea back in the summer of 2003.

Saints' fear seems to be that, from the agents' point of view, they could command the biggest fee for themselves if Bale were to move at the end of his contract.

That, however, would be a hammer blow for Saints in terms of a fee for a player they have raised through the ranks since he was nine.

Bale's rise to prominence has attracted massive interest from all of the Premiership's major clubs, many of whom have had scouts, assistant managers and in some cases even managers attending Saints home and away matches to watch him.

Even Real Madrid have been linked with Bale, though such transfer speculation has not been mentioned at all in the Spanish press.

That has inevitably sparked major transfer interest which Saints are keen to fend off, hence the contract offer.

Once an answer is known as to whether Bale will sign an extended deal or not - he signed an initial two-year deal last summer on turning 17 - his future at Saints will start to become clearer.