Liverpool have announced that Pako Ayestaran will step down from his position as assistant manager but will continue to be contracted to the club until June 30, 2008.

Reds Chief executive Rick Parry said on the club's official website: "Following discussions between Rafael Benitez and Pako Ayestaran, it has been agreed that it would be in the best interests of all parties if Pako leaves his post as assistant manager.

"Pako, however, will remain under contract to us until next summer.

"The club want to thank Pako for his hard work and contribution to our success over the past three years."