Reds linked with imposing La Liga midfielder.
Liverpool are working on a deal to sign Real Madrid midfielder Asier Illarramendi in the summer transfer window as they eye a replacement for Steven Gerrard, according to CaughtOffside.
The Spaniard has not always been a regular since moving to the Bernabeu last summer, but has previously impressed with former club Real Sociedad.
Liverpool are among his main admirers, along with Arsenal, as Brendan Rodgers seeks a quality player to replace the departing Gerrard next season.
Illarramendi would cost around £18m to sign in the summer, with Real ready to make a loss on the player they spent around £30m on in 2013.