RAFAEL BENITEZ is prepared to walk away from Liverpool when his current contract expires in 18 months unless the club’s American owners, Tom Hicks and George Gillett, agree to grant him complete control over transfer policy at Anfield.

The Liverpool manager alerted several European clubs to his potential availability yesterday - Real Madrid and, intriguingly, Manchester City and Chelsea among them – by revealing he had rejected a new contract offer that would tie him to Anfield until 2013 and increase his €4 million salary. His decision was prompted by the latest draft of the contract, received on Monday, which again did not include the final say on transfer targets, spending and wages.

Hicks and Gillett were unaware of Benitez’s intention to reject their offer in public and responded with claims that a compromise will be reached to keep the Spaniard at Anfield for the next five years.

Benitez, who walked out on Valencia for Liverpool over a similar dispute in 2004, has made it clear to the club’s hierarchy he would rather quit at the end of his existing deal in 2010 than compromise.

The Liverpool chief executive, Rick Parry, has the major influence on transfers Benitez is seeking, with the manager’s role currently confined to recommending who is bought and sold to the club’s board.

Benitez, who remains angered at Liverpool’s failure to meet Aston Villa’s €20m asking price for Gareth Barry last summer, announced: “The owners feel that the manager’s decisions need to be subject to the chief executive but I know that I am subject to results and to our fans and they are the best judges.

“I have a lot of experience in football at different clubs and if you do not have a technical director and you are the manager you have to have control of the football decisions. But always within the confines of a budget.

“In this scenario the manager knows the amount of money available to him and can decide how much he should spend on each player according to the needs of the team.

“The only person who can decide the value of a player to his squad is the manager, because he knows what elements are needed to improve the squad.”

Meanwhile, Manchester City have rejected claims they have signed Brazilian superstar Kaka.

Reports have emerged in the United Arab Emirates this afternoon stating the 26-year-old AC Milan player had agreed to join City during the current transfer window.

But City have been quick to dismiss the story, citing its origin as the same source that claimed yesterday morning the deal was off.

In fact, discussions will continue next week when Kaka’s father, who is currently on holiday in Brazil, will meet City officials to discuss their proposals.

Earlier, Milan coach Carlo Ancelotti confirmed the Eastlands outfit had made a bid, which was now being considered by the Serie A giants.

The sum involved – €120 million – would smash the world record transfer that saw Zinedine Zidane leave Juventus for Real Madrid in 2001.

It is thought Milan will accept the bid, leaving City to persuade Kaka of their worth.

Manager Mark Hughes is confident Kaka will be impressed, with the Blues also lodging a €14.5 million bid with Hamburg for Dutch international Nigel de Jong.

Ancelotti publicly contemplated life without Kaka for the first time yesterday and said he fully understood his club are considering the offer from Manchester City for the Brazilian attacking midfielder.

“There is an ongoing negotiation and the club will have to take the final decision on this matter,” Ancelotti said ahead of today’s Serie A match against Fiorentina.

“My personal wish is to be able to coach Kaka for many more years because he is a great player, crucial for this team.

“It’s impossible to make comparisons with the football of 20 years ago. Today there are great investors and obviously a club must consider many things in this sense.”

Milan fans have already started to show their disappointment at the negotiation over their idol but Ancelotti countered that Milan will continue to be competitive even without the Brazilian.

“The goals of this club will not change, with or without Kaka. As regards this season we have at least to qualify for the next Uefa Champions League and try to win the Uefa Cup. Even if we lose an important player like Kaka, this squad will be extremely competitive anyway. He is a great professional and this situation is certainly not disturbing him, he is living this moment with serenity.”

Ancelotti, who confirmed that the Brazilian will play against Fiorentina today, said neither the club nor the player had taken a decision on City’s offer.

“I think he will evaluate the good and the bad things of this move before deciding.”

Alex Ferguson insisted City will not pose a threat to his team even if they sign Kaka.

The Manchester United manager argued that even if City land the Brazilian, his priorities lie elsewhere. “With respect, Manchester City are not where Liverpool are or where Chelsea are,” he said. “You only worry about the teams that are taking money from your pocket or taking a trophy off you.”