Liverpool are battling Real Madrid for Valencia winger David Silva.

The News of the World says Rafa Benitez is ready to revive a bid for the Valencia star if he is forced to sell Xabi Alonso, 27, to Real for £25million.

But the Kop boss fears England's new 50 per cent tax law and the poor Euro rate are making it impossible to compete with La Liga sides.

Real are closing in on £20m Silva, which would scupper Benitez's plans to use funds from Alonso's sale to recruit the Spaniard.