Balance of power tilts to Benitez

New contract gives manager greater control of transfers but may not end the infighting at Anfield

For once, a contract announcement with impeccable timing. Liverpool were in the thick of their Premier League title race and preparing for the first of what were to be three encounters with Everton in January when Rafael Benitez announced, in no uncertain terms, that he was dissatisfied with the control he was being afforded within the terms of the proposed new deal which had just hit his desk. Last night's announcement of a new five-year contract comes ahead of Liverpool's renewed, if belated, assault on the title.

Though it also arrives against the backdrop of two of the most famous wins in the club's history – eight goals within the space of 100 hours against Real Madrid and Manchester United – the £4m-a-year deal cannot be seen as a direct reward for that. Benitez has been lobbying for weeks behind the scenes for an overriding aim: greater control over whom Liverpool pursue in the transfer market, with his agent Manuel Garcia Quilon rejecting half a dozen contract drafts. The word from both Liverpool's owners, Tom Hicks and George Gillett, was that the "checks and balances" of a corporate structure in which a chief executive operates between them and the manager must be in place at Liverpool, just like Manchester United. But Benitez, determined to avoid a repeat of the situation in July, when his protracted pursuit of Gareth Barry, the Aston Villa midfield player, ended in humiliation with the board vetoing an £18m deal, has gradually moved towards a position in which he feels comfortable.

The tortuous road towards this resolution stretches back to last April when Tom Hicks, seemingly trying to improve his own credibility in a particularly rancorous phase of his relationship with co-owner George Gillett, announced a one-year extension to a contract which expires next summer. It was hardly a ringing endorsement and on 7 November the Americans, aware that the prospect of Benitez's departure would damage their attempts to sell Liverpool, came up with a more positive announcement that contract discussions were starting in earnest. That public declaration created immediate time pressure and Benitez fanned the flames, declaring immediately that he wanted the whole business resolved by the end of that month.

Hicks and Gillett are all too familiar with Benitez's demands to deal directly with them. When they told the Spaniard in October 2007 to stop demanding more money and work through chief executive Rick Parry it presaged one of the longest sulks in Premier League history. Benitez waged the same kind of battle with the owners of the Extremadura club he managed in Spain in the late 1990s, insisting their facilities were inadequate, and the way he ridiculed the players Valencia bought him during a battle for transfer policy autonomy mirrors the recent one at Anfield. That spat brought us his now legendary line: "I asked for a table and they brought me a lampshade."

Parry has represented the prime obstacle to Benitez's ambitions. The Spaniard has taken issue with the way Liverpool's outgoing chief executive operates and with the lack of urgency, as he sees it, with which players are pursued. But Benitez has often been a source of supreme frustration. A favoured strategy has been to insist his board sign a player or lose them to Manchester United. Only last week, Benitez described dragging Parry to a fax machine to secure Lucas Leiva's services, before United might pounce. He made precisely the same warning about Italian defender Andrea Dossena, though to suggest United were interested seems far fetched.

As the Americans gradually ceded greater control towards the manager in the various drafts of the contract, Parry told Hicks and Gillett, a few days before Liverpool travelled to play Real Madrid in the Bernabeu last month, that he would be leaving at the end of the season. That appears to have been a critical staging post in the journey towards persuading Benitez that he will be operating in a different realm in the future.

So is this the end of the interminable power struggles at Anfield? Unlikely, where Benitez is concerned. Hicks and Gillett remain convinced that control of the manager's autonomy is necessary and in the words of one senior executive at Anfield, there is no way they will say to Benitez at the end of a season: "Here's £20m, we'll see you in September." The assiduous search for a replacement for Parry – commercial director Ian Ayres is a contender and former FA chief executive Brian Barwick was at the Liverpool/Real Madrid game – suggests the Americans are not looking for patsy. A strong chief executive means Benitez would have as much of a battle on his hands as ever.

But for now at least, the manager's future is secured and Liverpool have even more potential to achieve the near impossible and topple Manchester United, the champions elect.