Liverpool face competition from Real Madrid in the race to sign Brazilian starlet Lucas.
The Sao Paulo sensation has been heavily linked with a move to Europe, with clubs in England, Spain, Italy and France thought to be keen on a move for the 19-year-old midfielder.
However, El Confidencial claims that Los Blancos have stepped up their interest in the teenager, with Jose Mourinho tracking the player closely ahead of a possible move.
'The special one' is looking to add Lucas as cover for former Liverpool midfielder Xabi Alonso, it's claimed, with a view to the player taking a central role at the Santiago Bernabeu in years to come after learning under the Spanish international.
It's suggested that representatives of the club are in Brazil this week to discuss possible deals for both Neymar and Lucas, and the news will come as a blow to Liverpool, who were hoping to secure a transfer coup with the player's addition.
Kenny Dalglish has invested heavily in young players since his arrival at Anfield, with Andy Carroll and Jordan Henderson proving the owners on Merseyside are willing to invest in talent.
Lucas would be the icing on the cake, joining compatriot and namesake Lucas Leiva in the Liverpool midfielder, as well as left back Fabio Aurelio.
A transfer bidding war is something the Reds would not want to get involved in though, with the buying power of Los Blancos likely to be too much for Liverpool with their lack of Champions League football.