Bitter rivals Manchester City and Manchester United are set to battle it out for the signature of highly-rated Serbian defender Neven Subotic from Borussia Dortmund.

The 6ft 4in Serbia international is one of Europe's most coveted defenders after enjoying an impressive debut season with Dortmund following his €3.5million (£3m) move from Mainz last summer.

The 20-year-old, who made 34 appearances for Jürgen Klopp and scored six goals in the process, is valued at around £15million and is also reportedly being tracked by London rivals Arsenal and Chelsea

City are still in the market for a central defender after missing out on John Terry over the summer, and boss Mark Hughes is keen on luring him to Eastlands after received glowing reports on the no-nonense ace.

Meanwhile, United chief Sir Alex Ferguson is keen to add another top quality defender to his squad as an eventual long-term partner for Jonny Evans, and has been linked with Bolton centre-back Gary Cahill recently.

But he has been alerted to the talents of Subotic after a tip off from his compatriot Nemenja Vidic, and is now thought to be monitoring the young centre-backs progress with interest.

However, the defender has admitted he is no hurry to move after recently signing a new five-year-deal at the Signal Iduna Park.

"I am under contract at Borussia Dortmund and I am feeling well being there," said Subotic.

"Mid-term it could become an option to move abroad, but at this period of time a move to another country would be much too early for me."