The Aston Villa manager is considering his options after a ?9 million bid for N'Zogbia was rejected by the Latics.
Juan the man: Alex McLeish could turn to Vargas as he seeks replacement for Stewart Downing
Wigan are holding out for ?10m for the Frenchman.
Villa are the only club left in the hunt after Sunderland boss Steve Bruce dropped his interest due to the player's wage demands.
And McLeish's frustration over the stalemate could cause him to make a move for Peru international Vargas, who has been tracked by Liverpool and Juventus.
Running out of options: Villa are the only club in the hunt for Charles N'Zogbia
Tottenham are also keeping a close eye on Vargas.
Harry Redknapp almost signed the 27-year-old when he was manager at Portsmouth.
?Whelan tells Villa to cough up ?10m if they want to sign N'ZogbiaChelsea set to rival Villa with fresh ?7.5m bid for West Ham midfielder ParkerCLICK HERE TO SIGN UP FOR OUR FREE FANTASY FOOTBALL GAME
Source: Daily Mail
Source: Daily Mail