It was first reported that Chelsea wanted a £4.8m compensation, but The Sun revealed today that they are ready to release him for £1.2million.
New West Ham manager Gianfranco Zola wants to bring in Clarke as his No 2, but Chelsea chief executive Peter Kenyon have so far blocked his move.
Clarke is currently on a £600,000-a-year contract at Chelsea and the club wants West Ham to pay up the remaining two years of his contract.