Santos have dismissed speculation linking Neymar with Real Madrid. REUTERS

Real Madrid are reportedly interested in Liverpool striker Luis Suarez, after losing out on Santos striker Neymar.

Jose Mourinho has identified a new forward as a key component of the club's January transfer strategy, despite having a wealth of options already in his squad.

Gonzalo Higuain and Karim Benzema have both failed to impress so far this season, with additional support for Cristiano Ronaldo now an urgent requirement.

Neymar was his top target throughout the summer but the club appear to have missed out on the Brazil international after Santos president Luis Alvaro Ribeiro said he would report the La Liga club to FIFA if he found any evidence of an illegal approach.

Reports in the Spanish press claimed Neymar had already signed a pre-contract to join Madrid in January.

"Neymar has nothing signed. First because it is illegal. He has an active contract," he told Sport.

"It would be an illegality on the part of Madrid, I'm sure [Real Madrid president] Fiorentino Perez would not commit, because he could be reported to FIFA for incitement to negotiate a contracted player.

Subsequently, Mourinho has identified Suarez and Manchester United's Javier Hernandez as his top transfer targets when the window re-opens in January.

Liverpool are unlikely to even consider a bid for the 24-year-old Uruguayan, who only joined the club in January but The First Post reckons a bid in the region of £50m next summer could tempt the club to cash in, particularly if they fail to reach the Champions League for a third successive year.