European and Spanish champions Real Madrid are on red alert with Chelsea still to make Reece James a new contract offer, according to The Sun.

Despite being a key player in the Chelsea squad, the 22 year old Reece James earns around £70,000 a week at Chelsea.

The England international still has three years remaining on his deal, with Chelsea so far having not felt the need to bolster his salary to match his importance within their squad.

James’ contract situation at Chelsea has caught the eyes of Real Madrid, who believe he’s underpaid at Chelsea.

Premier League champions Manchester City are also monitoring the situation of James at Chelsea.

Real Madrid reportedly see James as a long-term transfer target and are ready to more than double what he currently earns at Chelsea.

James has been at Chelsea since he was aged six and Chelsea chiefs reportedly believe his emotional tie to the club negates the need to bump his salary for now.

Manchester City see James as the ideal player to succeed Kyle Walker at right-back while Real Madrid, who just recently signed Antonio Rudiger from Chelsea, are monitoring the situation of James at Chelsea closely.

Prior to Roman Abramovich’s exit, Chelsea had not made a move to tie James down long term and nothing has changed since Todd Boehly became the new owner.