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McLeish knows the two players well from his time in Scotland

Birmingham have had improved offers for Everton's James McFadden and Hibernian's David Murphy rejected.

Blues boss Alex McLeish had tabled bids of £3m for Toffees striker McFadden and £1.5m for Hibs left-back Murphy.

But Everton are thought to be holding out for £5m for McFadden, who has also been linked with a move to Celtic.

McLeish is also keen on signing Aston Villa defender Gary Cahill on loan for the rest of the season, but Villa are believed to prefer a permanent switch.

Scotland team-mate Garry O'Connor feels McFadden would be a welcome addition to the Blues squad who are tied on 20 points with Bolton, Wigan and Sunderland near the bottom of the table.

He said: "James McFadden is an unbelievable talent. If we could manage to lure him to Birmingham then he would be a fantastic signing.

"He has worked for the gaffer before and to get him here would be great because he's top class.

"If he came here he would score goals, as he has already done in the Premier League, and at national level, and he would be a great success and help the team."

O'Connor insists McLeish should up his offer for their compatriot to avoid losing out to the Old Firm who have already expressed an interest.

He added: "I think it might appeal to him. There's a lot of people after his signature but I think if we stump £5m up we would get him.

"That would be the price. Whether the funds are there I don't know, but hopefully the chairman and the board can give the gaffer some money.

"Hopefully the gaffer will make a few more signings. If we bring players in and keep playing like we did at Arsenal, then I think we will be fine."