Liverpool will not be rushed into a move to sign former star Michael Owen, despite Newcastle agreeing a club record deal with Real Madrid.
Owen, 25, has admitted he wants to join Liverpool, but is prepared to sign for Newcastle on a season-long loan if he cannot return to Anfield.
But BBC Sport understands Liverpool will not pay more than the £8m Real splashed out to land Owen last summer.
And he would have to take a pay cut to persuade Liverpool to pursue a deal.
Liverpool manager Rafael Benitez has been coy on the possibility of signing a player he agreed to sell last summer, insisting his priority is a central defender and a right-sided midfield player.
But he is interested, and BBC Sport believes Liverpool may finally show their hand after Friday's Super Cup Final in Monaco against CSKA Moscow.
Liverpool are playing it cool on Owen because they have spent big on strikers to sign Fernando Morientes and Peter Crouch.
And while there has been talk that Djibril Cisse may leave, Liverpool cannot afford to take a heavy loss on a player that cost them £14m only last summer.
Liverpool have also broken the bank to keep Steven Gerrard at Anfield, and are now unlikely to offer Owen a similar deal.
This leaves Newcastle in the frame, although their club-record offer looks doomed to failure with Owen only prepared to contemplate a loan move.
A Newcastle statement said: "Newcastle United have met Real Madrid's asking price and conditions."
Newcastle, whose current record fee is £15m for Alan Shearer in 1996, are now waiting to hear from Owen's advisers.
Owen was thought to be available for about £12m, but the Newcastle statement added: "The agreed fee will be a record transfer fee for Newcastle United. It is now up to the player and his adviser."
Madrid have promised to help Owen return home to boost his World Cup hopes.
Owen said: "I said that my ideal situation was to start the season in the Real Madrid team and if not I would prefer to return to Liverpool.
"If the transfer cannot be finalised in time I have agreed to go to Newcastle."
Real Madrid director of communications Antonio Garcia Ferreras confirmed they had not had an offer from Liverpool.
He said: "This morning Real Madrid and Newcastle United have reached the principles of an agreement on the conditions of Michael Owen's transfer to the English club.
"There is still no agreement between Michael Owen and Newcastle. At the moment we have not received any offer from Liverpool."
Owen spent much of his first season at the Bernabeu coming off the bench and the arrivals of Brazilian strikers Robinho and Julio Baptista this summer have seen him slip further down the pecking order.
The former Liverpool star had earlier indicated he was willing to stay and fight for his place, but after talks with president Florentino Perez has now had a change of heart.
He added: "I need to be playing regularly in World Cup year.
"I am most grateful to Senor Perez for his personal concern about my career. I have really enjoyed being part of his Real Madrid team."
Owen's return to Anfield would be welcomed by Liverpool fans, having scored 158 goals in 297 games in his first spell at the club.
Owen finished with 16 goals for Real last season despite being used primarily as a substitute.
On Tuesday Everton manager David Moyes revealed his club had spoken to Owen's representatives, but the player rejected a move to Goodison Park.
Lyon have also expressed an interest in the England striker, but he appears set for a return to England.