And the Aston Villa boss expects the England midfielder to be fit for the start of the season - whoever he is playing for.
Milner, 24, sat out both of Villa's pre-season matches in Portugal over the weekend after suffering back spasms.
The £30million-rated ace has been seeing a chiropractor to try to ease the problem.
O'Neill said: "The injury is just some back spasms and most players will suffer them at some stage.
"I'm hoping he'll be fit for the start of the season. The doctors don't seem to think it's anything incredibly serious that will keep him out for a lengthy time.
"To a man, everyone would want James to stay."
Inter Milan striker Balotelli is expected to make a £30million switch to England this week.
He famously fell out with former Inter boss Jose Mourinho and a string of the club's older players, including Javier Zanetti and Marco Materazzi, last season.
And Balotelli's San Siro colleague Eto'o has warned the temperamental hitman to sort his attitude out if he wants to be a success.
Eto'o said: "Mario has the potential to go on and be one of the best players in the world, but he must sort some things out in his head.
"The older players at Inter have always tried to advise him. I am not sure how successfully but, if he is to be a success and not waste his career he must listen to the players at Manchester City.
"This is the chance for a fresh start."
Meanwhile, Roma boss Claudio Ranieri has backed Balotelli to set the Premier League alight.
The former Chelsea boss said: "Balotelli is young but he is a champion.
"Going to Manchester City, it will be very important for him to improve. As a young guy, he will have the opportunity to become a man.
"Definitely, he still needs to improve, but I think he is a very smart young player."
Garrido is a ready-made replacement for Aleksandar Kolarov, who moved in the opposite direction to Eastlands earlier this month.
Lazio president Claudio Lotito said: "Garrido is a Lazio player. He was our first choice to replace Kolarov."
Spaniard Garrido, 25, struggled to establish himself at City after arriving from Real Sociedad in 2007.
Hart, 23, is back at Manchester City after spending last term at Birmingham.
And he is adamant he will not be happy playing second fiddle to City's first-choice keeper Shay Given.
His stellar performances on loan at St Andrew's won him a spot in Fabio Capello's World Cup squad.
And Hart has told Eastlands boss Roberto Mancini he would rather play elsewhere than warm the bench for City.
Asked if he is prepared to be an understudy, Hart said: "It doesn't really interest me if I'm honest. I've played a lot of football now and that's all I want to do.
"At the moment all I'm doing is playing football in the first team."
While Hart did not play in South Africa, he is in line for a fourth England cap against Hungary next week as Capello overhauls his under-performing squad.
But Hart admits the decision over whether he moves away to play more regularly is out of his hands.
He added: "It wouldn't be up to me, Manchester City are in charge of me at the moment. But if I wasn't playing, I suppose I would have to reconsider."
Hart's future at Manchester City remains uncertain with Shay Given fit again after injury.
The 23-year-old England keeper spent last season at Birmingham and has made it clear he wants regular first-team football.
City boss Roberto Mancini is reluctant to let Hart leave but Bruce needs a replacement for the injured Craig Gordon.
The Black Cats manager said: "We've asked the question of City and we now just have to wait and see what they say.
"But the timetable is not up to us on when we get an answer, it's up to them.
"With these new 25-man Premier League squad rules, clubs don't have to name their confirmed squads until the end of August.
"So if they wanted to, City could delay any decisions on their squad until then."
The Spurs boss is understood to have offered around £8million for the striker who snubbed him to join Manchester City from West Ham 18 months ago.
Aston Villa are also after Bellamy. But sources close to the club believe Spurs have outbid their rivals and can also offer Champions League football.
Redknapp wants Bellamy, 31, for his influence in the Tottenham dressing room - which he feels is too quiet - as much as his combative nature on the pitch.
The Spurs chief said: "We need a couple of experienced players - a few men in the team.
"Two or three would make a massive difference to us.
"Inter Milan won the Champions League with men, they weren't kids. I think it's going to be important."
City, owned by mega-rich Sheikh Mansour from the United Arab Emirates, have launched a new website.
Footage of Eastlands stars saying in Arabic "Follow the latest news on our Arabic website" can be viewed on the club's Facebook page.
The players enjoy varying degrees of success.
Winger Adam Johnson barely contains his North-East accent, while Mancunian Michael Johnson also belies his roots.
Patrick Vieira, Pablo Zabaleta, Micah Richards, Joleon Lescott and Adebayor join in as well.
Nira Abada, the club's Arabic media executive, said: "I was surprised how fast some of the players picked it up. Adebayor was especially good."
The £32.5million British-record signing left Eastlands on loan to former club Santos in February.
He spent six months with the Brazilian side and scored 11 goals in 20 appearances.
Robinho is expected to link up with City ahead of the new Premier League season.
But the Samba star has already expressed his desire to head back to Santos.
He said: "I hope to continue. My heart is here and I want to stay but I have to talk to my team.
"Santos have brought me happiness and good things."
The Togo star is concerned he will be left out of Roberto Mancini's starting XI following reports City are closing in on a £30million move for Inter Milan striker Mario Balotelli.
And with Carlos Tevez, Craig Bellamy, Roque Santa Cruz and Robinho among the other forwards on City's books, Adebayor claims he is now considering his future in England.
Speaking to Italian newspaper Tuttosport, he said: "I wanted to wear the City shirt and have a better season compared to last year.
"But I know there will not be many chances for me and so I am considering the many offers I have received."
The 26-year-old added: "I will be sorry to leave the Premier League, but in Europe there are other top leagues.
"Juventus are a great club in which I would like to play for.
"Until some time ago I would not have accepted a transfer to other clubs.
"The economic aspect is important but if it was one of the biggest clubs in the world I would consider other aspects."
Milner did not play in Aston Villa's friendly with Valencia last night and a £28million move could be sealed over the weekend.
Boss O'Neill said: "There's been contact. There's a possibility of something happening over the next few days."
City's Stephen Ireland may be part of the deal.
The Manchester City keeper will not be released, even he fails to nail down the No 1 slot.
City manager Roberto Mancini said: "If we play Joe, Shay Given will still have a role in the team and if I pick Shay then Joe will help him.
"I'm fortunate because I have two strong keepers and that is important in a long season."
Volatile striker Balotelli, who turns 20 on Thursday, has made it clear he wants to quit Inter Milan.
And Vieira believes the Italian would be a big hit at Eastlands.
The midfielder, who played with Balotelli at the San Siro, said: "He is a really exciting player.
"There is no doubt about his qualities as a football player. He is young and talented and that is really good for the future as well.
"He is similar to Craig Bellamy and Carlos Tevez. Players have their own temperament and their own way of behaving.
"But what is important is that everything a player has to do, he does it for the football club.
"He hasn't signed for us yet but he is a young talented player who enjoys his game.
"He is a good goalscorer who makes scoring goals look easy. He doesn't need five chances to score a goal."
The Manchester City boss insists he will keep Given and rival Joe Hart this season so he has a tough choice to make between the pair.
But he is believed to be leaning towards England's new No 1, meaning Given can expect a diet of Europa League and cup action.
Given, 34, said: "I haven't joined City to sit on the bench or whatever. I've gone there to play.
"If that's not the case, I suppose I'll sit down on Monday with the club and see where to go after that.
"You don't want to miss any football so, for me, it's very important that I play."
Given admits he may look for a loan move away from Eastlands for a few months to keep himself in shape - if the worst happens.
He said: "If I wasn't to play then possibly a loan thing or something just to get games. The transfer window closes 2½ weeks after Saturday so we'll hopefully discuss things after Monday.
"It's just purely guesswork at the minute. They let Joe go on loan last year to play so I don't know.
"It's too early to say, I just hope to play on Saturday. If that's not the case then we'll see what happens next week."
Given's City club-mate Emmanuel Adebayor has dismissed talk that he is looking to quit Eastlands with a move to Juventus this summer.
The Togo striker insists he is relishing the new season and wants to help City achieve something special.
He said: "We have all come here to try to make history and to do well.
"City has done everything they can for all the players to make sure we only have to focus on one thing - playing and winning. So now it is up to us.
"In any season there are difficult moments and good moments and hopefully we will have a season in which there are more good ones than bad ones."
Craig Bellamy
Craig Bellamy has admitted he may quit football if he is axed by Manchester City.
The Wales captain, who is by no means guaranteed a place in big-spending City manager Roberto Mancini's 25-man senior squad, revealed Tuesday he had rejected an offer to move to German club Wolfsburg -- managed by former England boss Steve McClaren.
The 31-year-old striker is set to win his 59th cap in Wales's friendly against Luxembourg in Llanelli on Wednesday in what will be the country's final match before their Euro 2012 qualifying campaign against Montenegro next month.
"I feel strongly I can offer something at the club," Bellamy said Tuesday. "But if I don't get in the 25-man squad, I don't know what I will do.
"I might finish, full stop, or look at every option I get.
"This game is as ruthless as any. I sort of feel I am not going to be part of it (at Manchester City). I can see it from a distance.
"I find that very difficult to take because I really enjoy playing for Manchester City. I think I have shown that with my commitment this year.
"I've had a few options. I've turned down Wolfsburg. I don't fancy Germany, it's not somewhere I see myself playing football.
"I have to see what options I have. I am here to play football.
"With this 25-man ruling, it doesn't matter how well I train or how good my attitude is, I might not be registered to play.
"So do I go without playing football until January, or do I find myself a club where I can play football'
"I am committed to stay where I am. I feel I deserve to be part of it, but I don't pick the 25 or the team. I have to wait on their decision."
City begin the new English Premier League season away to Tottenham Hotspur -- the team that pipped them to fourth spot and a Champions League place last term -- on Saturday.
Mario Balotelli
Mario Balotelli's proposed move to Manchester City was put in doubt on Tuesday when Inter Milan included him in their 32-man European Supercup squad.
Balotelli's on-off transfer saga to the Premier League big-spenders has rumbled on for weeks but Inter's move suggests they see him as part of their future.
The teenager, who turns 20 on Thursday, was due to make his Italy bow against Ivory Coast in London on Tuesday night and could now also feature against Atletico Madrid in Monaco on August 27.
The 32-man list, however, is not definitive and can be changed up to 24 hours before kick-off.
Balotelli, who was born to Ghanaian immigrant parents but brought up in an Italian foster family, is regarded by many as Italy's brightest young talent.
But despite breaking into the Inter Milan team at just 17, he struggled to command a regular place under Jose Mourinho over the last two years.
He has suffered racial abuse from the stands while his temperament has been regularly brought into question with Inter willing to let him leave and join former boss Roberto Mancini at Manchester City.
The Blackburn boss is willing to listen to offers for Jason Roberts so needs to bolster his frontline.
And Benjani, 31, could be an ideal recruit after Manchester City let him go.
Zimbabwean Benjani spent his first day at Rovers' Brockhall training ground yesterday as he aims for a short-term deal.
The Brazilian, whose loan spell with Santos in his homeland ended last week, wants out of England.
But City are willing to offer the striker a fresh start despite facing a fight to make their 25-man squad.
Mancini said: "I must speak with him. He said he preferred to go back to Brazil because there was a World Cup. Now the situation will change."
Not only that, the Welsh striker claims he is not the only player at Eastlands to be cold shouldered by the Italian.
Bellamy, 31, has been nursing a knee injury and has hardly featured in pre-season while players such as Brazilian flop Jo have been playing regularly.
The £10million signing from West Ham said: "I haven't spoken to the manager since February.
"There are a number of players, like Carlos Tevez and me, who he doesn't speak to and keeps us away.
"I'm not sure if it's personal. Maybe it's the way he deals with things and it's his manner.
"But I've got a fair indication of what they all think, though, as I've had 80 minutes in pre-season.
"I've even seen players not part of the club over the last three years get more minutes than me."
During City's recent tour of the USA, Bellamy indicated he wanted to stay with City and fight for his place.
With his age and a series of knee problems against him, he felt remaining at Eastlands was his best chance of winning silverware.
But Bellamy is now eyeing the exit door and claims he is not short of offers - with Spurs and Wolfsburg showing an interest.
A reunion with Mark Hughes at Fulham or a move to hometown club Cardiff also appeal, although it is doubtful either could get near his current £90,000-a-week wages.
Bellamy added: "There's been two clubs in the top seven who have tried to get me.
"Man City obviously want me to go, but not to one of their rivals.
"I've turned down Wolfsburg - they are the only club they tried to push me into.
"City wanted Edin Dzeko so they were pushing for a deal and wanted me to go the other way. But I've had my most offers ever and felt more wanted elsewhere.
"It's obvious Spurs have tried for me but Man City have declined."
Mancini will name his 25-man Premier League squad at the end of this month and Bellamy fears the worst, even though he claims he would like to stay.
The Welshman said: "If I'm not on the list, which is unlikely, then the only games I will get are with the reserves.
"I'm so committed to where I am and with the new players coming in I'm driving to stay here.
"But that's unlikely to happen. I've just come back after my best year in football.
"I got double figures in goals and double figures in assists and that's all as a midfielder. Enough said."
Bellamy hopes his former Wales, Blackburn and City boss Sparky might be able to raise the funds to take him to Craven Cottage.
He added: "If you look at my form with Mark Hughes I don't just become a good player, I become one of the top players in the Premier League. He gets the best out of me.
"Cardiff is another possibility. I've always wanted to play for them and my wife and kids live there."
The Swedish striker joined the Spaniards from Inter Milan last summer in a £60million deal which saw Samuel Eto'o move the other way.
But the arrival of £35m hitman David Villa could see Ibrahimovic's chances at the Nou Camp limited next season.
Manchester City and Chelsea have both been linked with the 28-year-old but the former Ajax ace says he intends to stay put — for now.
Ibrahimovic said: "I'm very happy there is an interest in me but I have four years more with Barcelona.
"I will not leave because I am very happy there and I play with the best team in the world.
"I'm very happy to stay but if clubs are interested in me, I take it as a compliment. It means I'm doing a good job."
Ibrahimovic admitted he would be keen on a move to England later on in his career.
He added: "To play in England one day — absolutely. I feel I can give much more and I can still develop.
"You never know what happens in football, in 24 hours a lot of things can change."
The striker ripped into boss Roberto Mancini and can now expect a fine.
A City source said: "This is just the latest in a series of incidents and the straw that broke the camel's back."
The Scottish giants have opened discussions with City over a loan switch for the out-of-favour striker.
Bellamy was yesterday left out of Roberto Mancini's squad for their Europa League qualifier against Timisoara.
And Celtic boss Neil Lennon today confirmed the club had approached City with a view to taking Bellamy back to Parkhead.
Lennon said: "When you see someone of the calibre of Craig and the fact that he's not in the 25 and he's looking to go out and play football, then we feel it's something that we can't try and miss out on.
"We've been speaking to his representatives and we've been speaking to Man City.
"How far down the line we are will be down to Craig obviously. But the advantage we have is that, one, it's not in the Premier League and, two, he has been here before and he enjoyed his time here.
"He made a huge impact on the game up here and has a real connection with the supporters."
The former England Under-21 ace claims the influx of foreign stars at Eastlands forced him to move on.
Onuoha has signed a season-long loan deal at the Stadium of Light.
And he said: "It's an exciting move for me, to be honest.
"The way things were going for me at Manchester City, I didn't really think I was going to be a part of things this season.
"Steve Bruce had mentioned an interest in me and to have him wanting me was a great thing.
"I've come here to learn and develop myself and with someone like Steve at the helm I can't go too far wrong.
"I didn't really see myself being in contention at City but hopefully I have the same chance as everyone else here.
"I'll play in the middle, left, right — wherever I play I'm happy to do so.
"If I do well hopefully I can keep the shirt."
Sunderland kick off their Premier League campaign against Birmingham on Saturday
Onuoha added: "I can't wait for what will be a huge game.
"I've been at City for 14 years now and the first game is going to be huge for me. I'm really looking forward to it.
"This is brand new to me. I've never come close to something like this before. It's all new and I'm really enjoying it."
The mega-deal would make the Barcelona striker the highest-paid footballer in the world, earning £24m a year.
That dwarfs the salaries of top stars such as Lionel Messi, Cristiano Ronaldo and Kaka.
City representatives made their mouth-watering offer direct to Ibrahimovic's manager Mino Raiola to show how much they want to capture the Swedish international.
The huge deal dwarfs the 11m euros a year the striker picks up at the Nou Camp.
Ibrahimovic is unsettled at Barca despite joining only last summer in a 50m euro deal that also took Samuel Eto'o from Barcelona to the San Siro.
The enigmatic forward fell out with Barca coach Pep Guardiola in February and the pair barely speak now.
Ibrahimovic is upset he has not been a regular starter and he has clashed with his coach over Barca's style of play.
So the chance to be involved in building a new club to rival Europe's best is an attractive proposition, especially with such a salary on offer.
The striker is familiar with City boss Roberto Mancini after the pair's time together at Inter Milan.
A source close to Ibrahimovic said: "City have shown how much they want Zlatan and although he is well paid at Barcelona this offer is in a different league.
"It has given him plenty to think about especially when he is not so happy with his football at Barca.
"The idea of being part of a move to create a new super club to challenge the very best in Europe is also attractive.
"City have to agree a deal with Barcelona before this can go any further - but there's a feeling that could all happen fairly quickly now."
Unsettled Brazilian star Robinho could move to Barcelona as a makeweight in the deal.
Ibrahimovic's arrival would raise more questions about the futures of strikers Carlos Tevez, Emmanuel Adebayor, Roque Santa Cruz and Craig Bellamy as City continue their spree.
The clubs have agreed a deal which would see City pay around £16m for Milner with £8m-rated Ireland going to Aston Villa in part-exchange.
Both players have agreed personal terms with their new clubs.
But the golden handshake demanded by the former Republic of Ireland international, 23, could scupper the deal.
City insiders last night remained hopeful the deal will finally go through - but they have no intention of meeting Ireland's demands.
England midfielder Milner returned to Villa Park after international duty yesterday but was awaiting the green light to travel up to the North West.
Bellamy, 31, fears he will be left to rot at Eastlands after Roberto Mancini confirmed he will not be part of the squad for City's Europa League qualifier against Timisoara.
The Italian must also submit a 25-man selection to the Premier League by September 1 and the striker appears to be surplus to requirements.
Mancini said: "I have to choose 25 and the rest must find another team. Craig is out of the list."
Welshman Bellamy vented his anger on TV earlier this week and now Hughes has joined Celtic in the race to sign him.
Sparky previously managed the striker during spells in charge of City, Blackburn and Wales.
Asked if he wanted to be reunited with Bellamy, Hughes said: "If he comes on the market, and if we're in the position where we can conclude a deal for Craig Bellamy, then yes we would be very interested.
"At the end of the day the way the situation seems to be forming for Craig is that Manchester City won't use him at Premier League level.
"So from Craig's point of view it is very important that he makes the right decision for his career because a wrong decision at this point in time could hurt him."
The Wales striker was hit with a £160,000 fine after claiming Mancini was trying to force him out of Eastlands.
He also revealed he had not spoken to the Italian manager since February following a blazing row at the club's training ground.
Bellamy has been left out of City's provisional 25-man squad for the new season — meaning he will have to find a new side if he is to have any hope of playing first-team football this season.
Tottenham, Fulham and Celtic are all interested in signing him and a move seems inevitable now Mario Balotelli is set to finalise his £30million move from Inter Milan tomorrow.
Mancini said: "Bellamy can talk but it is not important because it is false.
"Last year Craig played all the games with me. This year I have chosen other players. I am the manager. I make this choice.
"The rule is I have to make a list of 25 players and choose my team from that list. The ones who are out need another team and Craig Bellamy is out of the list."
City boss Roberto Mancini earlier revealed the club are close to completing a move for the England midfielder.
But Villa's caretaker-manager Kevin MacDonald has still opted to pick him for what could be his final appearance for the club.
Milner has not featured in any of the Villans' warm-up matches since the World Cup but he played 20 minutes as a substitute for England against Hungary on Wednesday.
MacDonald said: "The latest about Milner is that talks are still ongoing. Nothing can be done today in terms of him being signed in time to play tomorrow.
"James has been put in the squad and will be available to play for Aston Villa against West Ham.
"I didn't have to think hard about putting James in the squad.
"It was a pretty straightforward decision for me. You need to get your best players on the pitch. James is one of our best players.
"James would also have the mental strength to deal with it if the crowd reaction is hostile. He is a tough lad.
"I would expect him not to let it affect him and he is very much a team player."
MacDonald was non-committal on whether he would like to replace Martin O'Neill on a permanent basis.
But he admitted owner Randy Lerner had asked him to be ready to take charge for another week if a successor to O'Neill is not imminent.
The former Liverpool midfielder said: "Would I like to be a manager? What will be will be. Mr Lerner told me to prepare the team for West Ham.
"I spoke to him today and he also asked me to make preparations for next week just in case. That's all I'm doing."
The Inter Milan striker flew to England today to undergo a medical and finalise personal terms.
Mancini said: "We are close with Balotelli. Hopefully today or tomorrow. Mario is on his way here."
While Balotelli is one of the hottest prospects in Italian football, he enjoyed a love-hate relationship with former Inter boss Jose Mourinho.
It appears the 20-year-old also failed to impress new San Siro chief Rafa Benitez, yet Mancini is confident a switch to Eastlands will revitalise the temperamental star.
The Italian bad boy, 20, signed a five-year deal worth around £4m a season at Eastlands but then revealed on his personal website: "I am sad to leave Inter Milan because I'd have preferred to carry on professionally in my home country.
"But I'm about to begin a new adventure. I'm going where I hope I will find the space to play because, for me, that is very important.
"I need to play, to make mistakes, to learn and to play even more. I also need a more serene atmosphere."
Balotelli had a mixed last year at Inter, during which he regularly fell out with boss Jose Mourinho while his team went on to win the Champions League.
He added: "I leave behind a difficult year.
"I've recognised my mistakes but believe I have found myself at the centre of pressure and criticism which, in certain cases, left me exasperated.
"Now all I am thinking about is playing well for my new team in the Premier League and I will give it my best effort."
City boss Roberto Mancini is delighted to be reunited with Balotelli after launching his career while in charge at Inter.
And he vowed to turn the wild man of Italian football into one of the world's best during the next two years.
Mancini said: "In one or two years he will become one of the best players in the world. He will be very popular with our fans.
"Balotelli in England could be fantastic and I don't think he will have a big problem here. He can play right wing, first striker, second striker. He's fantastic. "
"He's only 20 but he is a strong character and a good guy."
Balotelli was the subject of racist taunts during his Serie A playing days and many of his problems are believed to stem from that.
Mancini added: "He has not always behaved so well - but he's a good man."
And the Eastlands chief is confident Aston Villa's James Milner will join City next week.
He added: "We have to be patient for Milner but it'll probably happen after the Spurs game."