Chelsea in chase for Lulinha - the new Ronaldinho

Chelsea have stepped up their pursuit of Lulinha, the latest wonder-kid of Brazilian football, by sending two scouts to watch the 17-year-old play on Wednesday evening. It is now hoped by the Premier League club that an £8m deal to sign the precocious striker may be agreed in time for the January transfer window.

The scouts were sent to Rio Janeiro at the behest of Frank Arnesen, Chelsea's chief scout and director of youth development, who is determined to sign Lulinha having missed out on another Brazilian prodigy, Alexandre Pato, last summer despite offering more than £13m for the teenager who later joined Milan.

Lulinha currently plays for the Brazilian club Corinthians and the scouts watched him in the 2-1 away defeat to Flamengo. Despite the loss, which leaves the famous old club near the bottom of the league table, Lulinha caught the eye by setting up his team's goal with a solo run.

The youngster, who does not turn 18 until April, can play as an attacking midfielder or as a "second striker" and has been dubbed the "new Ronaldinho" in South America because of his flamboyant playing style. He is regarded as a player in the classic mould of a "Brazilian Number 10" and is also a prolific goal-scorer – having struck 12 goals in just seven matches earlier this year as Brazil won the South American Under-17 Championships.

A host of clubs around Europe are interested in Lulinha with the Palermo president, Maurizio Zamparini, declaring last week that he could not compete with the likes of Chelsea and Real Madrid. Tottenham Hotspur are also thought to have expressed an interest but Chelsea are, clearly, in pole position.

Lulinha – who is also known as "Lula" – is the kind of exciting, attacking player that Chelsea's owner, Roman Abramovich, wants to bring to his club, especially following the departure of Jose Mourinho. There is also pressure on Arnesen to produce more stars through Chelsea's youth set-up, with questions being continually raised over the effectiveness of the signings he has supervised.

Lulinha is contracted to Corinthians until June 2009 but it is thought that he is highly likely to leave sometime this season for a European club because of the current level of interest in him. He joined the Brazilian club when he was just eight, making his first-team debut just three days short of his 17th birthday.

He has long been compared to Ronaldinho, having shone in a series of under-age tournaments for club and country – with 27 goals in 15 matches for the Corinthians under-17 team. His potential has already attracted a long-term, lucrative deal with Nike.

If Chelsea can sign Lulinha it may, ironically, lead to them shelving any tentative interest they retain in getting Ronaldinho to join them from Barcelona. Abramovich has long targeted the 27-year-old – and indeed discussed whether or not he should try to hijack his move to the Nou Camp in July 2003 soon after he acquired Chelsea.

Further discussions were held with his brother, and agent, Roberto Assis, this summer although some senior figures at Stamford Bridge are sceptical as to whether Ronaldinho really wants to move to England or is simply angling for a better contract in Spain.

However, his star has waned at Barça and it is likely that the Catalan club would listen to offers at the end of this season. Chelsea's hand is also strengthened, should they go ahead with a bid, since they seem to be the only credible suitor.

Milan have long been registered as interested in Ronaldinho but, with Ronaldo, Filippo Inzaghi and Alberto Gilardino all struggling, their main priority next summer is the recruitment of a top-class striker. Their targets include Lyon's 19-year-old Karim Benzema – also being tracked by Arsenal – and Chelsea's own Didier Drogba who has expressed his desire to leave and would love to join the Rossoneri.

Chelsea still hope to appease Drogba, but may also have to deal with interest from Milan in their central defender, Alex.

The Chelsea manager, Avram Grant, watched Branislav Ivanovic and Diniyar Bilyaletdinov play for Lokomotiv Moscow against FK Tom in the Russian capital last Sunday. The pair are likely to cost around £20m.