Walker threatens release request as Souths hold on new deal

Rabbitohs playmaker Cody Walker has given the club an ultimatum: upgrade my contract or let me go.

He has been in stellar form for South Sydney over the first months of the season but has been unhappy with contract negotiations to date.

7 News reporter Josh Massoud understands his management met with Rabbitohs officials about an immediate upgrade to his contract, which is said to be modest compared to his value on the field.

Talks have been going on for about four weeks but they've come to a head since South Sydney became interested in signing Newcastle's Dane Gagai for a reported $750,000 per season.

Walker's management wants to know why the Rabbitohs have that money for a recruit but not for a current player of his level.

They have given Souths a 48-hour deadline to come up with an upgraded offer or he will request an immediate release.

But Souths officials say they will not release him from the final 18 months of his contract.

The club says they understand Walker's situation and will come up with a new offer when the NRL confirms the 2018 salary cap numbers.

The Rabbitohs sit 12th on the NRL ladder with a 4-6 record after defeating Wests Tigers 28-8 on the weekend.