Liverpool are reportedly prepared to walk away from a deal to sign Chelsea target Moises Caicedo from Brighton & Hove Albion.
The Ecuador international is currently at the centre of one of the most dramatic transfer sagas in recent memory, with Chelsea and Liverpool both vying for his signature.
The Blues have been pursuing the 21-year-old throughout the transfer window, but their refusal to meet Brighton's £100m valuation allowed Liverpool to surge to the front of the queue.
Reports emerged on Friday morning that Liverpool had a £110m offer accepted by the Seagulls, before Liverpool boss Jurgen Klopp confirmed that a deal had been agreed.
As a result of the agreement, there was a belief that Caicedo would undergo a medical ahead of a proposed move to the Merseyside club.
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However, Chelsea made it clear that they intended to better Liverpool's offer, with Sky Sports News reporting that they are working on a £115m deal.
Caicedo has supposedly informed Liverpool that he will not be joining the club, as he looks to complete a move to Stamford Bridge.
According to journalist Fabrizio Romano, the Reds are now preparing to walk away from a deal to sign the Brighton midfielder.
Liverpool have been busy overhauling their midfield this summer, following the departures of Jordan Henderson, Fabinho, Naby Keita and Alex Oxlade-Chamberlain.
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The Reds have already recruited Dominik Szoboszlai from RB Leipzig and World Cup winner Alexis Mac Allister from Brighton.
However, their hopes of reuniting Caicedo with his former Brighton teammate appear to be dwindling, with Chelsea currently in talks over a transfer.
Caicedo has attracted interest after impressing during his 37 Premier League appearances for Brighton last term, helping the club finish in sixth place and qualify for the Europa League.
Ironically, Liverpool will kick off their campaign with a trip to Stamford Bridge for Sunday's encounter against Chelsea.
