Manchester City are firm favourites to land Liverpool contract rebel Raheem Sterling, with the forward ready to snub interest from abroad to stay in the Premier League, sources have told ESPN FC.
Sterling's long-term future at Anfield has been the subject of intense speculation again this week with reports emerging that he was planning to inform Liverpool of his wish to leave at planned talks on Friday. ESPN FC reported last month that Sterling was prepared to reject any contract offer from Liverpool this summer as he sought a move elsewhere.
However, those planned contract talks have now been cancelled by the club over comments attributed to the player's agent, Aidy Ward, in the London Evening Standard.
England international Sterling, who still has two years to run on his deal at Anfield, has already turned down a £100,000-per-week contract to alert a host of clubs in the Premier League and across Europe.
However, sources say Liverpool's position is unchanged and they are not prepared to sell Sterling this summer.
The likes of Manchester City, Chelsea, Arsenal and Manchester United are all monitoring Sterling's situation and are ready to test Liverpool's resolve to keep hold of the 20-year-old.
Sources have told ESPN FC that Liverpool have already rejected an enquiry from Manchester United about the player's availability and it looks highly unlikely they would sell one of their prize-assets to their biggest domestic rivals.
Raheem Sterling seems set to test the transfer waters this summer.
Arsenal boss Arsene Wenger is an admirer of Sterling and has refused to rule out a move for the forward, but they are unlikely to be able to compete with City or Chelsea in a potential bidding war.
Liverpool remain hopeful that a compromise can be reached in the contract stand-off to keep Sterling at Anfield, but if they are unable to make a breakthrough in negotiations in the summer they may have to decide to cash in on the speedy attacker rather than keep an unhappy player whose transfer value will only go down if the situation drags on.
Liverpool would prefer to sell Sterling abroad if they had to let him leave, but sources say Sterling has no plans to go overseas at this stage of his career despite interest from Real Madrid and Bayern Munich.
City are ready to test Liverpool's resolve to keep Sterling with a firm bid as soon as the season is finished and they feel they can offer the player the stage to be challenging for trophies and playing in the Champions League on a regular basis.
ESPN FC has been told that City's hierarchy are huge admirers of Sterling's talents and feel his arrival would put down a major marker for their ambitions next season.
City would also be well-placed to pay big for Sterling due to the expected relaxation of the financial fair play rules (FFP), which hindered their efforts to make marquee signings last season.
