Liverpool must see off competition from Manchester City for Nacional defender Sebastian Coates.

The Mirror says Anfield boss Kenny Dalglish is hoping to make the 20-year-old his sixth signing of the summer following a formal £7million bid.

Coates' Uruguayan club, Nacional, have yet to accept the offer and are understood to be holding out for around £10m from other suitors - principally mega rich City.

But they have given the player's agent, Matias Pittini, permission to discuss personal terms with Liverpool.

While City have also held talks with Nacional they have yet to turn their preliminary interest into a formal bid, but manager Roberto Mancini is known to want to sign one more defender before the transfer deadline.