Liverpool are closing in on a deal to sign Bayern Munich midfielder Thiago Alcantara, according to Sport.

The Catalan newspaper claims that the “agreement between the player and Liverpool is done” but the Reds have yet to match Bayern’s €35m (£31.5m) asking price.

It is believed that the Merseyside club are not willing to pay the full amount for Thiago up front, most likely due to concerns over the financial impact of the global crisis.

However, it appears they could look to sign the 29-year-old by paying in instalments if they can’t lower Bayern’s demands for the player.

There have also been reports in Germany that Thiago is angling for a move away from Germany, with the Spanish international seeking a new challenge.

The midfielder has under a year left on his contract at Bayern, and he was all set to sign an extension, but it seems a switch to England is looking like a real possibility.