Aston Villa have confirmed that they have rejected an improved offer from Liverpool for midfielder Gareth Barry.
Liverpool have been chasing the Villa captain for some time and were thought to be close to agreeing a deal for the 27-year-old England international.
"The offer we received was a slight improvement on a previous bid," said an Aston Villa spokesman.
"But our position on the issue remains unchanged and Liverpool have been informed."
Barry's agent Alex Black told BBC Radio 5 Live that the player has told Villa manager Martin O'Neill of his desire to play Champions League football next season.
However, O'Neill has been critical of Liverpool's pursuit of Barry, who captained England for the first time and scored his first international goal during the recent friendly against Trinidad and Tobago.
Liverpool are keen to partner Barry in midfield with his England colleague Steven Gerrard and have declared their interest publicly, much to O'Neill's fury.
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Last month Barry said he was putting off all talks over his club future as he concentrated on his international duties with England.
The Reds are reported to have had an initial bid of £12m rejected for the player, who has been at the club for more than 10 years.
The latest bid is thought to be £13m, but Villa are said to be holding out for £18m, which could pose a problem for Liverpool manager Rafa Benitez.
The Anfield boss has admitted he is expecting to have a reduced transfer budget as a result of the feud between American owners Tom Hicks and George Gillett.
"If we had a lot of money to spend it would obviously be better," Benitez said on the club website. "But if we don't, it doesn't matter.
"It is not about buying the most expensive players, it is about buying the right players and we can sell some players to get the others we need. We have the spine of the team and we just need others in other positions."
But former Aston Villa chairman Doug Ellis says the club should hold out for the £15m they believe Barry is worth.
"If Gareth goes, and I fear he will as Steven Gerrard has been begging him to do so - then right now I wouldn't sell him for less than £15m," said Ellis. "If I was advising Liverpool, I would say 'dig deep' because he is such a good asset.' It will be a big loss to Villa and I would fight like hell to keep him - but of course I am no longer there."