Manchester City are set to beat Liverpool for Inter Milan youngster Rene Krhin.

The People says Hughes has lined up a shock £7 million raid for the 6ft 3ins midfield powerhouse who is tipped to become one of the top players in Europe.

King-sized Krhin has been with Inter for two seasons after being spotted as a kid with Maribor in his homeland. He has also just won his first cap for the World Cup hopefuls against England last month.

Liverpool boss Rafa Benitez was hoping to add Krhin to his small squad, but City have stepped in first and tied up a deal behind the scenes.

Krhin is refusing to sign a new deal with Inter because of the City interest, although his agent Marcel Kacinari is trying to keep the transfer secret.

He said: "Rene's contract with Inter will expire in 2011 and we are talking with the club to extend it until 2014. It's true that the negotiations are lasting a bit too long, but there are no problems.

"I have been contacted by many clubs, especially from England and Germany, but for us there is just Inter."