Manchester United have opened talks with Grêmio about signing Douglas Costa, their highly rated Brazil Under-20 attacking midfield player, as Sir Alex Ferguson steps up his search for the new Cristiano Ronaldo.

Douglas, 18, has been closely monitored by United for more than a year, but despite interest from a host of leading European clubs including Real Madrid and Inter Milan, Ferguson is confident of signing the player this summer as the Barclays Premier League champions continue to look to Brazil for potential stars of the future.

As well as signing Anderson, the Brazil midfield player, from Porto in July 2007, United have plucked three Brazilian players — the Da Silva twins, Rafael and Fábio, and Rodrigo Possebon — from relative obscurity in the past two years.

John Calvert-Toulmin, United’s principal scout in Brazil, recommended that Ferguson sign Douglas last summer, but the manager has opted to wait until now to make his move. Douglas is rumoured to have a £21 million release clause in his contract with Grêmio, which has four years left to run, but United hope to secure him for less than that. Any deal would be dependent on the player getting a work permit.

Douglas, who is left-footed and has been likened to his compatriot, Ronaldinho, the AC Milan forward, underlined his burgeoning potential this year when he helped Brazil to victory in the South American Youth Championship.

“There have been informal conversations and I believe United would match those values,” Cesar Bottega, Douglas’s agent, said yesterday. “At the end of the Brasileirão [the South American league championship that ends in December], Douglas will be worth at least twice that.”

United are also understood to have agreed a £5.5 million deal with Corinthians for Dodô, a 17-year-old defender who is expected to join the club next February, although given that he has a Portuguese background and holds an EU passport, that proposed transfer is not expected to be complicated by red tape.

Carlos Alberto, Brazil’s World Cup-winning captain in 1970, accused United this month of “raping Brazilian football” and has urged Fifa, the sport’s world governing body, to intervene to prevent the country’s most promising young players from being lured away by Europe’s leading clubs, but United are proud of their expanding operation in South America.

As well as employing two full-time scouts in Brazil, United secured a deal last year with Desportivo Brasil, a youth club owned by Traffic Football Management and a subsidiary of the largest sports agency in Latin America, that gives them first option on more than 120 teenagers whose development in São Paulo is being overseen by Carlos Alberto Parreira, the country’s 1994 World Cup-winning coach.

Ferguson also hopes to conclude a deal for Antonio Valencia, the Wigan Athletic and Ecuador winger, before the squad flies to Asia for a pre-season tour in the middle of next month.

Manchester City completed their second signing of the summer yesterday with the capture of Roque Santa Cruz from Blackburn Rovers. The Paraguay striker, who has signed a four-year contract, will cost an initial £16 million, with the fee rising to £18 million with add-ons.

Liverpool have concluded the £18.5 million signing of Glen Johnson from Portsmouth on a four-year deal worth £80,000 a week.