Liverpool's prospective investor Steve Morgan must return with a vastly improved offer if he is to buy any real influence in the club after the board last night rejected his proposed scheme to inject £73 million (€109 million) as "not attractive".

The club's directors emerged from a five-hour meeting at Anfield yesterday to say they would not be taking up the 51-year-old building magnate's offer on the grounds that it effectively valued the company at around £61 million (€91 million). The chairman David Moores and his board considered Liverpool to be worth nearer £150 million (€224 million).

While the door has not been shut on Morgan, it is clear that only a substantially increased bid will be considered if he is to realise his dream of exerting a greater say at the club he has supported since his childhood.

The Jersey-based businessman was last night said to be "considering his options", though the impetus appears to have swung back behind the proposal put forward by the Thai prime minister Thaksin Shinawatra.

Confirmation of Liverpool's rebuff of his "grand vision" will come as a major blow to Morgan, the club's third largest shareholder with a 5 per cent stake but a figure who has long endured a fractious relationship with the chairman. An initial proposal worth around £50 million (€75 million) was rejected in March.

Under his revised scheme the club's existing shareholding - 35,000 shares valued at around £4,000 each (€6,000), generating a total of nearly £150m - would have been restructured to leave 350,000 shares at £ 1,750 each (€2,610).

That would have valued the club at just £61 million, with the potential £73 million raised by rights and shares issues - to be underwritten by Morgan's company Bridgemere Investments Ltd - to be invested in players and the move to a proposed £120 million (€179 million), 61,000-seater stadium on Stanley Park. Yet Liverpool, in discussion with their financial advisers Hawkpoint Partners Ltd, considered that plan to have undervalued the club.

"The board notes the Bridgemere proposal, at £1,750 per share, implies a current value of £61m for the entire club which is a substantial discount to the value placed on the club by the board," said a Liverpool statement. "The board has therefore concluded the Bridgemere Proposal, as currently constituted, is not attractive." Liverpool will contact Morgan, currently out of the country, to discuss the proposal today and remain hopeful Redrow Homes founder will not stick by his insistence this was his final bid.

There could yet be grounds for compromise, particularly with public support firmly behind him. A poll in a local newspaper yesterday indicated that 87 per cent of those asked preferred taking up Morgan's option as opposed to that of Thaksin.

Yet, while no decision has been taken on the Thai bid - whereby a stake of just under 30 per cent would have been bought for around £56.5 million (€84 million), falling in with Liverpool's valuation - the rejection of Morgan's offer will have been welcomed by manager Gerard Houllier, who has been upset by Morgan's attack on his management style and transfer record.

"It has been written that Steve Morgan wants a new manager and that I'm in the sixth year of a five-year plan," said Houllier, whose side secured fourth place in the Premiership and a chance to qualify for the Champions League after Newcastle's failure to beat Southampton on Wednesday. "That is mischievous because I have only been in charge for five years.

"In those five years we have qualified for the UEFA Cup in the first year and last year, and for the Champions League the other years. I was asked to qualify for the Champions League only every three years and we have done more than that. We have also managed to get six trophies and reach the quarter-finals of the Champions League.

"The signings have been criticised, but if a club like Liverpool cannot spend £8 million or £9 million-a-year it is difficult to understand because some clubs have done more. People say signing Diouf was a mistake, but we won a major trophy with him. And what about the players we have signed who have increased the value of the squad? I'm not going to send out a team which is not good enough to represent Liverpool."

Meanwhile, Newcastle chairman Freddy Shepherd met manager Bobby Robson at St James' Park yesterday to consider the impact of Wednesday's draw and the realisation that defeat tomorrow at Anfield will leave Newcastle without European football - and its income - for the first time in three seasons.

Robson emerged from the afternoon appointment unscathed and not under the impression that today's game will be his last as a manager of any football club.

Yet that remains a possibility for the 71-year-old. How large a possibility is Shepherd's call but, if Newcastle lose at Liverpool and Bolton defeat Fulham, Newcastle will finish seventh. In that eventuality Newcastle will be in a situation best summarised as fluid and there will be questions about questions.