The Reds have struggled at left-back all season and have made strengthening the position a top priority for the next transfer window.
It was thought Liverpool boss Kenny Dalglish and director of football strategy Damien Comolli had settled on Newcastle United's Jose Enrique as their preferred choice, but it now seems they will be looking a bit closer to home.
According to the News of the World, their new target is Everton's Leighton Baines.
The 26-year-old England international has impressed with his attacking play and set-pieces this term, and has been credited with 11 assists in the Premier League.
Dalglish and Comolli are said to believe Baines can plug the gap defensively and also provide the crosses needed to get the best out of £35 million striker Andy Carroll.
Everton would be reluctant to sell one of their best players to their local rivals for fear of a backlash from fans, but the club's financial position means they may have to give serious consideration to a £10 million bid.
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