We have studied the effect of Ar annealing on the electrical and magnetic transport properties of Pr_0.7Sr_0.3MnO₃ manganite. It is observed that, with increase in the annealing time there is a progressive decrease in T_C and, resistivity, as functions of temperature become broader with the occurrence of two metal–insulator transitions. Electron-spin resonance analysis shows that for the Ar annealed sample, additional lines are present much above T_C and the activated intensity behaviour and the paramagnetic linewidth behaviour points to the existence of spin clusters above T_C. The metal–insulator transition was found to be percolative in nature with the high temperature transition having a temperature-dependent metallic volume fraction (p) while the low-temperature broad hump could be described by a bond percolation model with temperature independent p.