There is an almost even chance of Real being paired with one of the London clubs, both of whom could also face Barcelona or Bayern Munich among their five potential opponents, when the draw is made in Nyon, Switzerland, this morning.
Four English clubs have made it through to the last 16 of the Champions League for the first time but the Premiership's representatives all face the prospect of tough encounters.
Manchester United and Liverpool, who finished runners-up in their groups, have three Italian sides among their five possible opponents and Alex Ferguson believes fate will deliver his first European encounter with AC Milan.
"The only team we haven't played in my 18 years at United is AC Milan," Ferguson said. "We did play them in the United States during our summer tour, but I have a feeling fate will throw it that way."
The draw at UEFA's headquarters will see the sides who finished top in their group - such as Arsenal and Chelsea - paired with a runner-up. Such was the way the group stage panned out, however, that arguably there is little advantage in finishing top. Real Madrid, Barcelona, Manchester United and Bayern Munich were all runners-up, but they are the clubs with the best overall records in the Champions League.
Liverpool manager Rafael Benitez insists there is little to choose between all the sides left in terms of quality. "We are into the knockout stages now and look forward to finding out who we will play," he said. "I'm not concerned with who that will be because at this stage of the competition every team is a good team, they all have excellent qualities."Juventus would be familiar opponents for United, the Reds having inflicted the Italian side's biggest European defeat on home soil two years ago with a Ryan Giggs-inspired 3-0 win at the Stadio delle Alpi.
"We have played against Juventus so many times," Ferguson added.
"They have strengthened in one or two positions and they have a new coach in Fabio Capello, but basically most of their team is still intact from when we last played them."England is the only country to have four teams in the last 16, and the shift in the balance of power means that, for the first time since 2001, Spain will have only two participants left in Europe's elite club competition.
It means there is a realistic chance of England going one better than in 2001 when three Premiership sides reached the quarter-finals.
The draw also shows an improvement in the performances of sides from Germany and Italy with three from each country qualifying. Not since 1997/98 have three German teams made it out of the group stage.
Clubs from the same association cannot play each other and those who met in the group stage must also be kept apart.
The eight teams who finished in third place in their Champions League groups will be among the 32 sides - including Newcastle and Middlesbrough - in the UEFA Cup draw.
The eight teams entering the tournament from the Champions League will be paired with runners-up from the eight UEFA Cup groups. Group winners such as Middlesbrough will play a third-ranked team.
THE teams who finished top in their group will be paired with a runner-up.
Clubs cannot play sides from their own country nor those they faced in the group stage.
The teams who finished top in their group are Monaco, Bayer Leverkusen, Juventus, Lyon, Arsenal, AC Milan, Inter Milan, Chelsea.
The teams who finished runners-up are Liverpool, Real Madrid, Bayern Munich, Manchester United, PSV Eindhoven, Barcelona, Werder Bremen, Porto.
Arsenal's possible opponents: Real Madrid, Bayern Munich, Barcelona, Werder Bremen, Porto.
Chelsea's possible opponents: Real Madrid, Bayern Munich, PSV Eindhoven, Barcelona, Werder Bremen.
Manchester United's possible opponents: Monaco, Bayer Leverkusen, Juventus, AC Milan, Inter Milan.
Liverpool's possible opponents: Bayer Leverkusen, Juventus, Lyon, AC Milan, Inter Milan.
*The matches will be played on February 22/23 with the return legs on March 8/9.