Sunderland have stepped up their bid to sign Newcastle's Scottish defender Steve Caldwell, as Michael Gray completed a move to Blackburn Rovers last night.

Rovers snapped up Gray on a free transfer and cleared another high earner off the wage bill at the Stadium of Light.

Ewood Park boss Graeme Souness moved in ahead of Celtic, Charlton and Bolton to clinch the deal for Sunderland's longest serving player.

Gray, 29, had been at the club for over 13 years, since June 1990, and made 411 appearances.

He was given a free transfer as a reward for long service. Chairman Bob Murray said: "He has been a loyal servant here for many years and this move will give him the opportunity to kickstart his career with a new challenge."

Blackburn have taken over the remaining two and a half years of Gray's contract.

The defender, who won three England caps under Kevin Keegan, joins the list of big salary earners who have left Sunderland since the summer - cutting the wage bill by more than half.

Souness said last night: "He's a player we have been interested in for a while.

"We are short of left-sided players, and the advantage of somebody like Michael Gray is that he can play at left back, left wing or left wingback. He would give us extra options."

The move has reinforced the Black Cats desire to clinch the signing of Caldwell, despite Sir Bobby Robson's unwillingness to release the 23-year-old.

Sunderland will make a final attempt to do a deal inside the next 48 hours after a club delegation saw Caldwell make a successful comeback from injury in Monday night's reserve team game against Everton.

The defender has been sidelined for a month with a thigh problem but he gave a robust performance in front of watching Sunderland assistant manager Ian Evans.

Sunderland still have an £850,000 bid on the table for Huddersfield striker Jon Stead, and Murray hinted last week that manager Mick McCarthy still hoped to bring in a couple of players for the assault on promotion.

His other target is Caldwell, who is determined to quit St James' Park after making only two senior starts this season.

With Gary Breen unlikely to return to first team action before the FA Cup fifth round clash with his former club Birmingham on February 14, a move now for Caldwell makes good sense.

And while Phil Babb and Joachim Bjorklund have put in sterling performances this season, the pair have never been in McCarthy's long-term plans.

Breen, sidelined since November with medial ligament trouble, has his sights set on Birmingham, where he spent a season playing alongside current boss Steve Bruce seven years ago.

"It's a good tie for us, a home tie, and I hope to be fit," he said. "I'm back in training and things have gone reasonably well.

"Birmingham fans are passionate like Sunderland fans so it should be a good atmosphere."