Liverpool face reported competition from Everton and Spurs in the race to sign Argentine international Fernando Gago.
The Real Madrid midfielder is thought to be one of a number of players heading for a Santiago Bernabeu exit this summer, with Liverpool boss Kenny Dalglish reportedly monitoring the situation.
Speculation reached fever pitch a fortnight ago, with claims in the Sunday People that the Anfield outfit were preparing an offer for the 24-year-old midfielder.
Now, talkSPORT claims that both Everton and Spurs have joined the race to sign the player, with David Moyes and Harry Redknapp adding the former Boca Juniors star to their list of potential summer additions.
The news will come as a blow to Liverpool, who were hoping to land the player for a fee under Los Blancos' €10 million valuation.
Jose Mourinho is thought to have cleared the player for a summer exit with the Argentine keen to play first team football, something Liverpool boss Dalglish was hoping to offer the player.
The Scot has hinted at a number of summer changes on Merseyside, with Dalglish looking to strengthen his Liverpool squad in a string of positions.
Christian Poulsen is thought to be heading for a Reds exit after failing to impress under the new regime, and the investment of Liverpool owners NESV could be crucial come the end of the season.