Liverpool could reportedly renew their interest in Brazil international Diego this summer, although he has not ruled out a move back to Wolfsburg.
The 27-year-old has spent this season on loan with Atletico Madrid, having fallen out with the Wolfsburg hierarchy after a series of misdemeanours at the German club.
However, it would appear that Dalglish's chances of securing Diego's signature have suffered a setback, with a return to Wolsfburg now a possibility.
"Anything can happen. It is not only in my hands. I did many things wrong in Wolfsburg," Diego said, according to talkSPORT.
Diego made 32 appearances for Wolfsburg after only one season at the Volkswagen Arena, following a €15 million transfer from Juventus.
This season, he has scored three goals in 21 appearances for Atleti, who have the opportunity to sign him on a permanent basis when the loan agreement expires.