Liverpool are reportedly fighting Real Madrid in the race to sign Borussia Dortmund striker Lucas Barrios.
The 26-year-old Paraguayan striker has been in fine form for the runaway Bundesliga leaders this term, leading to speculation over a potential big-money move away from Signal Iduna Park.
Liverpool manager Roy Hodgson was thought to be one of the parties interested in the player, with the Anfield chief searching for an attacking foil for Fernando Torres as his number one priority in the New Year.
However, Spanish paper Marca claims that Real Madrid boss Jose Mourinho has joined the chase for the player, with the La Liga giants keen to find cover for Argentine international striker Gonzalo Higuain.
Manchester City were also thought to be keen on rivaling Liverpool for the player's signature, and Roberto Mancini could again look to make a move for the player as the Carlos Tevez saga rumbles on at Eastlands.
A long-term target of the Merseyside outfit, Barrios is thought to have originally appeared on the Liverpool radar when Rafa Benitez was in charge of the club.
Hodgson is believed to have continued the interest after glowing references from the Liverpool scouts, and were considering an offer in the region of €17.5 million.
Madrid are now thought to be favourites for the former Colo-Colo star, but Liverpool could yet make a fight for the player in January.