Real president Ramon Calderon has declared his interest in the Spanish midfielder, which Wenger slammed as disrespectful behaviour.
Calderon said: My policy is not to create a confrontation with other teams but Cesc is No 1 in his position. I would like to have him.
Furious Wenger had earlier warned Calderon: I dont want to sit there and hear Madrid come out and say they want this player and Barcelona come out and say they want that one.
I never come out and say that I want a player from Real Madrid or Barcelona because of respect to these clubs.
If I want a player from them I call them,
I know who to call and ask if theyre selling him.
All the rest I find that its like We walk all over everybody else and we dont care about anybody.
Its unacceptable. But nothing will ever be done.
The rule when a player is under contract is that you first contact the club to see if a player is available.
Were not stupid enough to believe it really happens like that but I think you have to be decent enough not to come out in newspaper because its unsettling as well.
That they contact agents behind our back, we understand.
But that they come in a newspaper I find disrespectful.
Calderon had told reporters: If Cesc wants a change we will be there to negotiate.
Cesc is a player that all managers and technical directors like and ours do too.
But it has to be a decision that comes from him. It has to be the player to understand a cycle has ended and he wants a change.
If thats the case well be ready to negotiate with his team.
Calderons words will infuriate Wenger, who has hinted he is ready to sue Inter Milan for tapping up midfielder Alexander Hleb.
The Belarus midfielders future is also uncertain following the very public overtures of Inter, who have already met his representatives.
Reporting Real to FIFA is an option Wenger is certainly prepared to take.
It is not the first time Madrid have caused outrage with their blatant disregard for FIFA rules.
They tapped up David Beckham after ex-president Florentino Perez invited him to the Bernabeu.
Perez also approached Arsenals Patrick Vieira and held a private meeting him but the French internationals move fell through.
Real have constantly shown a desire to sign Manchester United ace Cristiano Ronaldo.
The winger came close to joining them two years ago after his World Cup spat with Wayne Rooney.
Barcelona have also tried to lure Arsenals players on numerous occasions.
They nabbed Thierry Henry for £16million last summer.