Liverpool boss Rafa Benitez is ready to cash in on midfielder Javier Mascherano.

The Sunday Times says Benitez is close to conceding defeat in his attempts to keep Mascherano after Real Madrid moved for the combative midfielder.

Barcelona were already courting Mascherano when Madrid entered the chase last week. Having set two high watermarks for transfer fees with the £56m purchase of Kaka from AC Milan and their £80m offer for Manchester United's Cristiano Ronaldo, new president Florentino Perez is prepared to pay £38m for the joint transfer of Mascherano and right-back Alvaro Arbeloa.

With Mascherano - who is keen to move to either of Spain's premier clubs - valued at £30m, the sum would be a record fee for a holding midfielder.