Liverpool have made an enquiry for Real Madrid midfielder Isco, according to reports in Spanish publication AS.
The Champions League winners are reportedly lining up a huge bid for World Cup star James Rodriguez and will use any transfer fee received to fund the deal.
The 22-year old netted 11 times for the club last season after joining from Malaga in 2013.
Number of interested parties
Italian giants AC Milan and Spanish club Sevilla are both apparently keen on the youngster, who despite his talent found it difficult to break into a Real Madrid side with a plethora of attacking options.
Despite the interest from other clubs it seems Liverpool have made the first move as they look to spend the £75m they received for Luis Suarez wisely.
The news comes after Isco was linked with a surprise loan move to Sevilla, before he put paid to any rumours on Twitter, saying,"Obviously all lies."
That put Liverpool on red alert and it looks as though they are firming up their interest in the playmaker.
The arrival of German starlet Toni Kroos also signalled to Isco that there may not be a place for him in the team once again next season.
The 22-year old would fit in nicely with Brendan Rodgers' attacking style and could provide extra support to Daniel Sturridge.
If Liverpool do put in a concrete bid for the player it would represent a major coup for a club that is looking to reinvest in the squad as they prepare to play Champions League football for the first time since 2009.