Liverpool manager Rafael Benitez has rejected the terms of the contract which was offered to him this week, according to a report.
The Spaniard has refused to commit to the deal because of a disagreement with owners George Gillett and Tim Hicks over his level of control.
Benitez told the Liverpool Echo newspaper: "The owners feel that the manager's decisions need to be subject to the chief executive."
He added: "But I know that I am subject to results and to our fans and they are the best judges I will ever have."
The news comes at a key stage in Liverpool's season, with the Reds set to play Merseyside rivals Everton in the Barclays Premier League on Monday.
Benitez has steered Liverpool to the top of the Premier League, as they pursue a first title in the top flight since 1990, however Manchester United are currently hot on their heels.
Speaking earlier in the week, Benitez claimed he was baffled by reports he was on a collision course with the club's American owners.
It was suggested he was locked in a power struggle with Hicks and Gillett over the terms of his proposed new contract.
There were claims Benitez had demanded complete control over transfers and more say in the running of the club's youth academy. However at the time he stressed he had not had enough time to read over the contract and make any decision.
Benitez said on Tuesday: "I don't have any problems at all with the American owners."
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