Inter Milan have reportedly rejected Liverpool's offer of a player-plus-cash deal to sign midfielder Mateo Kovacic this summer.
According to Corriere Dello Sport, the Reds are keen on signing the midfielder, but are not prepared to match the Serie A club's £21.5m ($33.6m) valuation of the player.
Brendan Rodgers has reportedly offered around £15m ($23.4m) for the services of the Croatian midfielder who is being touted as Steven Gerrard's replacement, but it has been rejected by the Italians.
The Merseyside club have reportedly offered Mario Balotelli as part of the deal, but that was swiftly rejected by the Serie A club, who are adamant that the midfielder will only be sold if the Reds agree to meet their valuation of the player.
The Italian striker, who joined the Reds last summer failed to live up to expectations and contributed with just one goal in the Premier League all season. This has prompted the manager to offload the striker and sign a replacement.
The report claims that Inter are willing to part with the young Croatian international as they look to boost their coffers ahead of the summer transfer window, but will do so only if interested clubs meet their valuation.
Roberto Mancini is looking to strengthen his team after a disappointing 2014/15 campaign, but due to Financial Fair Play regulations, the club will have to sell some players before the manager can enter the transfer market.
The Reds have been one of the busiest clubs in the English top flight this summer, and have already signed three players, with James Milner and Adam Bogdan arriving on free transfers from Manchester City and Bolton Wanderers respectively, while Danny Ings was signed from Burnley with the two clubs yet to come to an agreement on a compensation fee for the striker, who was out of contract.