Local rivals Aston Villa and Birmingham are in talks about a possible swap deal involving Villa central defender Curtis Davies and Blues winger Sebastian Larsson, Press Association Sport understands.
The Blues had already set their sights on signing Davies in a straight £3.5million deal and the player has already held talks. But Villa boss Gerard Houllier has revived his earlier interest in Larsson, who is out of contract at the end of the season.
If a deal could be agreed, Birmignham would consider offering Larsson plus £1.5million for Davies' services.
The Blues want to strengthen their back four with Scott Dann out for the remainder of the campaign with a hamstring problem.
Davies had looked set to rejoin Leicester on loan for a second spell before Birmingham made their interest known.
Houllier has already spent £24million during the January transfer window on Darren Bent and Jean Makoun from Sunderland and Lyon respectively.
But the possibility of signing Larsson in exchange for Davies has rekindled his interest in a further signing.
The big sticking point could be whether Larsson is prepared to sacrifice an appearance at Wembley in the Carling Cup final against Arsenal on February 27.
He will be a free agent in the summer when, if they were still interested, Villa could sign him for nothing.
Davies would welcome the move after slipping down the pecking order at Villa.
He could follow current Birmingham players Craig Gardner and Liam Ridgewell in switching from Villa to St Andrew's.
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