A new deal for out-of-contract Bombers gun Darcy Parish could end the club's pursuit of Bulldogs star Josh Dunkley.

The Herald Sun's Jon Ralph reports that Essendon has around $2 million in cap space and their number one priority remains locking away star free agent Zach Merrett.

But an improved contract extension for Parish, who is coming off a dominant performance against Collingwood on Sunday where he racked up 42 disposals and booted two goals to win the ANZAC Day Medal, now looms as a priority and may no longer make Dunkley a feasible target.

The Bombers tried to acquire Dunkley last trade period but were not willing to hand over two first-round picks to get it done - which in essence would have cost the club two of Archie Parkins, Nik Cox or Zac Reid.

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And while is is not known if Dunkley, who sought a more consistent role in the midfield, is still keen to move to Essendon given the Bulldogs' hot start to 2021, the Tullamarine-based club simply may not be able to fit him in.

Following injuries to Jye Caldwell and Dylan Shiel in the early rounds, Parish has blossomed with more midfield opportunities.

The former Pick 5 has averaged 31.7 disposals, 7.7 clearances and 5.2 inside 50s since being moved into the engine room from Round 3.

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Speaking on Fox Sports News’ AFL Tonight, Ralph revealed that the Bombers' contract talks with Parish have not escalated.

“His contract talks have gone absolutely nowhere,” Ralph said.

“The No.5 selection from the draft in 2015 and one of those reasons is that he hasn’t been able to get some serious midfield time over the last couple of years and certainly not over the first couple of weeks.

“And then we saw injuries to Jye Caldwell and Dylan Shiel. His last month has been extraordinary, 97 per cent as an inside midfielder. You saw the effect of that confidence with 42 possessions and two goals with the Anzac medal there. No.1 in clearances in the competition, No.6 for disposals in that time.

“Geelong has also been a club that has asked the question, they’ve nibbled even harder at him. Know he is a Winchelsea boy and via the Geelong Falcons, I think if he was pushed to the half-forward flank for the rest of the season there might’ve been a problem.

“But right now Essendon has two million dollars of salary cap space and their No.1 priority is Zac Merrett, who would be liking all of the things that Essendon are doing but I think they’d feel very confident if they continue to give midfield time to Darcy Parish he will get the contract he deserves.”

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Ralph added that it might be in the Bombers' best interest to remain on their current path and keep developing youth.

“The Josh Dunkley factor of last year, two first round picks is the price they would have to acquire, it might be time to park that decision and move on with the kids,” he said.

“It has been an exciting couple of weeks for the Dons.”

It was revealed on Monday that Dunkley will undergo a major shoulder reconstruction after suffering an injury in the area on the weekend, sidelining him for at least four months.