Manchester City weighing up £50m raid on Liverpool's Raheem Sterling
Manchester City are considering whether to meet Liverpool's £50m valuation of Raheem Sterling after submitting a second unsuccessful bid, of £35.5m, for the player.
City's bid contained another £5m in add-ons, but it was soon clear that Liverpool would reject it.
City's first bid, submitted last Thursday, was for £25m before add-ons.
Liverpool's valuation of Sterling has always been £50m and their negotiating position last night was still that City must pay that sum, before add-ons, if they want to sign the unsettled 20-year-old winger.
City are unlikely to offer that much with their next bid and are now weighing up the size of their third offer for the player who is their top priority this summer.
A third bid is likely to be £40m before add-ons which, while not Liverpool's asking price, would be large enough to prompt serious consideration at Anfield.
By far the likeliest outcome is that City and Liverpool will agree a price for a player who has no intention of signing a new contract at Anfield.
But the pace of the bidding - City increased their offer by £10m after just six days - suggests that Liverpool will eventually be able to earn close to their asking price.
There are still almost two months until the season starts. Even the Sterling camp was thought last night to be slightly surprised by the intensity of City's bidding.
Sterling is keen on a move to City, having told Liverpool last season that he would not sign a new deal worth £100,000 per week, three times his current salary.
Sterling had initially hoped for parity with Daniel Sturridge on £150,000 per week but his stance hardened as the season wore on, especially as Liverpool's form tailed off and they fell out of the reckoning for next season's Champions League.
His agent, Aidy Ward, declared in May that Sterling would not sign for "£900,000 per week", at which point Liverpool gave up hope of persuading him to agree a new deal.
Liverpool have believed for a while that Sterling has had his head turned by other clubs.
It was revealed in March that Liverpool were open to the possibility of selling Sterling to City if they could earn near to £50m for him.
Liverpool are now close to doing that.
City's manager Manuel Pellegrini said in the same month that Sterling would probably cost £100m but City are likely to be able to sign him for half that.
City's willingness to spend big on Sterling is an indication of their determination to sign more English and home-grown players for the forthcoming season.
James Milner has joined Liverpool on a free transfer while fellow England international Frank Lampard has finally gone to New York City FC in the MLS.
Sterling is City's top priority but they are also close to completing a deal for Patrick Roberts, Fulham's 18-year-old winger.
Roberts has one year left on his deal at Fulham and the two clubs are ready to agree an £8m fee for the England Under-19 starlet.
If City do sign Roberts, he is likely to be loaned out next season.
City also have a long-standing interest in Everton midfielder Ross Barkley, although that has cooled recently.
Pellegrini and City's director of football Txiki Begiristain have been in Chile this week watching the Copa America.
The pair saw Chile draw 3-3 with Mexico on Monday night.
Juventus midfielder Arturo Vidal, a long-standing target for Manchester United, scored for Chile but was arrested for drink-driving the following day after crashing his Ferrari near the city of Santiago.