Liverpool have rejected a £30m bid from Manchester City for the transfer of Raheem Sterling and are holding out for a fee in the range of £50m from the Premier League club, according to the Daily Mirror.

The midfielder has openly revealed his desire of not extending his contract with the Reds, which expires in 2017, but Liverpool are not willing to let him go for a lower price and are holding out for a sizeable fee from rivals. Manchester United and Arsenal have also been linked to the player, with the Red Devils having already had a bid rejected for his services.

The player reportedly prefers a move to London, but Arsenal are yet to approach the Anfield forward and are unlikely to make their interest known, as Theo Walcott may extend his contract with the Gunners.

On the other hand, City are unlikely to be deterred by Liverpool's rejection, given Sterling holds the cards in the transfer with his contract situation boiling over. The Reds are desperate to hold on to their most promising player after the departure of Luis Suarez, which has seen them drop out of the top four and finish the season in sixth spot, which could have been much worse given their disastrous start to the season.

Meanwhile, the 2013/14 Champions are looking to add more homegrown talent to their squad to comply with the FA rules, something they failed to do last season. The departure of James Milner has opened the doors for more investment and with the FIFA Fair Play rules likely to be relaxed this season, the Cityzens are looking to make full use of the opportunity and invest heavily in the squad.

City will be hoping that Milner's transfer to Liverpool over the summer will sweeten the deal and help them complete a deal for Sterling, who is among England's most precocious talents on offer.