City had a Ã‚Â£20m bid for the PFA Young Player of the Year rejected, but O’Neill admitted on Friday that the England midfielder could be on his way out of Villa Park next week.
“We didn’t play him against Valencia because there could be something happening in terms of the transfer over the weekend or Monday or Tuesday,” said O’Neill after his Villa side drew 0-0 with Valencia in a pre-season friendly.
“Until that possibly develops I thought it best to leave him out of the Valencia game.
“To my knowledge no fee has been agreed but talks are taking place involving our chief executive and the chairman.
“I think for everyone’s benefit it is probably time to try and get something done.
“Losing your best players at the club obviously causes you a headache and it is a problem.
He added: “It happened two years ago with Gareth Barry when it was not resolved.I’m sure that no-one wants to go down that route again.
“If and when the transfer takes place I will have to speak to the chairman about future transfer dealings.”
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