Liverpool have rejected a loan offer from Southampton for Mamadou Sakho, a source has told ESPN FC.
Saints wanted to take the out-of-favour defender on loan until the end of the season, with Jose Fonte set to depart St. Mary's, but Liverpool are adamant that Sakho will only be leaving on a permanent deal in the January transfer window.
Sources told ESPN FC earlier this month that the Reds are demanding £20 million for Sakho, who last played for the first team on April 20, 2016.
However, Southampton boss Claude Puel later on Thrusday dismissed the club's interest in Sakho as "speculation."
When asked about the 26-year-old Liverpool defender, however, Puel responded: "I know this player but I know nothing about this, it's speculation.
"We have a reflection about this possibility to see another centre-back if Jose Fonte left. For the moment it's not the situation, and perhaps we will stay with the same squad, with good opportunities for Jack Stephens or Gardos.
"It's a long time with a lot of injuries for Gardos, but he came back for the under-23s before this game [against Norwich in the FA Cup] with a good level and we will see if we just have Jack [Stephens] and Florin, or you might see another player if Jose Fonte leaves Southampton."
The French centre-half has only featured for Liverpool's under-23s side this season, having been frozen out of Jurgen Klopp's first-team plans for numerous disciplinary issues.
This summer saw him sent home from Liverpool's preseason tour to the United States for breaching club rules on three separate occasions.
Sakho went against the club's wishes later in the same summer as he turned down the chance to spend the 2016-17 season on loan at Stoke City or West Bromwich Albion, with Liverpool wanting Sakho to depart the club on a temporary basis to help him get his career back on track.
In September, Sakho then reportedly used Snapchat to voice his frustration at being frozen out.
Sakho moved to Anfield in the summer of 2013 from Paris Saint-Germain for a deal worth around £18m.