Madrid on red alert as Owen talks collapse

Michael Owen's glittering association with Anfield appeared to be at breaking point last night as both club and player debated whether it was worth him appearing in Liverpool's most vital fixture of the season.

As Real Madrid and Barcelona prepared contract offers for the 24-year-old, the Liverpool manager Rafael Benitez refused to state whether Owen would play in this evening's Champions' League qualifier with AK Graz, worth around £15m to the winners. If Owen participated, he would be ineligible for any Uefa competition this season which would reduce his value to both Spanish clubs - and his value as a transfer asset to Liverpool.

Owen and his advisers have spent the last 15 months negotiating a new contract to replace the existing deal which expires next year. Despite initial optimism from the Liverpool chief executive, Rick Parry, talks in New York during the club's American tour proved fruitless. Owen's mood would have not have been improved by Benitez informing his close friend, Danny Murphy, that the midfielder had no future at Anfield. That Murphy's move to Tottenham broke down yesterday would have had little bearing on Benitez's resolve not to pick him again.

The Liverpool manager, whose success in persuading Steven Gerrard to reject Chelsea's advances, won him early respect at Anfield, pointedly refused to discuss the striker as Liverpool trained at the Arnold Schwarzenegger Stadium yesterday. "I cannot talk about the future," he said. "I have 19 players in Austria and Michael is on the list. If he plays, it is because he is the right player for the game. If he does not, it is because another player is considered better, nothing more than that."

It is likely that Benitez will start Djibril Cissé and Milan Baros in attack, an acceptable combination of Liverpool's record signing and Euro 2004's leading scorer, who has given him no assurances he wishes to remain on Merseyside. Leaving Baros out might precipitate a crisis all of its own, although one not so dear to Liverpool hearts.

Benitez has already allowed 10 members of Gérard Houllier's expensively assembled squad to leave, ranging from costly flops such as El Hadji Diouf and Bruno Cheyrou to genuinely-regarded talent in the shape of Anthony Le Tallec. Owen's removal would be in a different order entirely, since he joined the club as an 11-year-old and is Liverpool's most marketable footballer.

Nevertheless, Liverpool would not regard his departure with the foreboding that they saw Gerrard's proposed transfer to Chelsea. Despite Houllier using every kind of strike partner for him, Owen's last two seasons at Anfield have been disappointing and Liverpool are desperate to avoid a repeat of the situation that allowed Steve McManaman to leave Anfield for Madrid in 1999 without a transfer fee. Before setting off for Austria, Benitez cryptically remarked about Owen that: "If we have to do something, then it's better to do it."

Having failed in prising Thierry Henry from Arsenal, Owen would make an acceptable substitute to Real Madrid, who may offer a player in part-payment. They have a half-share in Samuel Eto'o, a striker Benitez tried to sign when managing Valencia, although Fernando Morientes would prove less of an attraction. Failing that, £20m should make an acceptable war-chest for the Spaniard.