Rafael Benitez's attempts to reshape his Liverpool squad are increasingly being frustrated by rival clubs' inflated valuations of their players, effectively casting yet more doubt on the future of Steven Gerrard at Anfield.

The European champions remain publicly confident that the England midfielder will sign an extension to his contract upon his return to pre-season training at the end of the month, but Benitez is also painfully aware that Gerrard remains his principal saleable asset and, should he instead listen to offers, the incoming transfer fee could significantly help fund further purchases.

Real Madrid officials have twice contacted Benitez in recent weeks about the midfielder's availability and Chelsea, who thought they had missed out on the 25-year-old's signature for the second successive summer, also retain an interest in the knowledge that the Liverpool manager is attempting to instigate a major revamp of his squad with only around £25 million to spend.

That money would cover up to six new arrivals, though negotiations for potential new players are proving protracted. The Villarreal goalkeeper Jose Reina will join the club this month for £6 million, but Feyenoord want £10 million for their Dutch striker Dirk Kuyt.

Similarly, Southampton have rejected a £5 million bid for Peter Crouch, while discussions continue with Zaragoza for their £6 million-rated defender Gabriel Milito.

Inquiries have also been lodged with Bayern Munich for Owen Hargreaves, with Benfica for the full back Miguel and with Albacete for winger Mark Gonzalez. Benitez has also been a long-term admirer of the Real midfielder Juanfran.

However, the funds would not stretch to the recruitment of all the players on that wish-list and, as yet, Liverpool have been unable to raise extra money by offloading players from the current squad.

Bruno Cheyrou, Salif Diao, Alou Diarra and Milan Baros have all attracted interest from French clubs, but only the out-of-contract Vladimir Smicer and Igor Biscan have so far left Anfield.

Everton are struggling to reach agreement with the Spanish midfielder Mikel Arteta over personal terms despite agreeing a £2.8 million fee with Real Sociedad.

The 23-year-old spent six months on loan at Goodison Park last season.