Parry refuses Hicks' demand to resign as Liverpool slip into chaos

The bitter boardroom power struggle that is plaguing Liverpool took another extraordinary turn yesterday when the chief executive, Rick Parry, refused a demand from co-owner Tom Hicks that he resign. The open hostilities between the major figures at the club have now become so debilitating that there is discussion about the possibility of an independent mediator to try to broker peace.

It emerged yesterday that Hicks had written a three-page letter to Parry to tell the chief executive, who is coming up to 10 years in the job, that he should resign. However, with only a 50 per cent holding, the Texan businessman has no power to force Parry out. He responded by saying he was going nowhere and would "remain focused on the job of serving Liverpool football club".

It is understood that the news of Hicks's demand was conveyed privately to supporters first through his son, Thomas Jnr. The letter itself arrived at Anfield less than two days after Liverpool beat Arsenal to reach the Champions League semi-finals. Undaunted, Parry, who was in London when the letter arrived, is understood to have sent his refusal by return of post. He was in the capital attending a Football Association hearing which rejected Javier Mascherano's appeal over an extra two-match suspension following his red card at Manchester United.

There is no surprise at the hostility from Hicks towards Parry, whom the American now regards as in the camp of his estranged business partner, George Gillett, who owns the other 50 per cent stake in Liverpool. With the help of Parry, Gillett would like to sell his stake in Liverpool to the Middle East consortium, Dubai International Capital (DIC) but has been blocked by Hicks who has first refusal on the shares. Gillett's unwillingness to sell to Hicks has caused a tense stalemate which has resulted in yesterday's demand.

Yesterday, sources close to DIC said that they were still interested in buying the club but would have to wait while the feuding American co-owners, and Parry, resolved their differences.

In order to break the stalemate between the owners, the possibility of an independent negotiator to try to break the impasse has been raised. In the meantime, the financing of the proposed new stadium at Stanley Park is likely to be delayed yet again by the feuding.

DIC still believe Hicks will have to sell when the strain on his finances becomes intolerable which could be accelerated by the rising cost of borrowing on money markets. More investment is needed to push ahead with the new stadium, which the club plan to have ready for August 2011. Last year Hicks refinanced his and Gillett's original deal to buy the club to the tune of £350m. Should they sell out to DIC, both will negotiate separate deals and would hope to make around £75m profit each.

Hicks has made a martyr of first manager Rafael Benitez and now Parry by publicly seeking to replace them. It was a recent interview with Parry in which he discussed the breakdown of the relationship between Hicks and Gillett that was understood to have convinced Hicks to ask for Parry's resignation. It was also a matter of time before Hicks responded to an interview that Gillett gave to a Canadian radio station last month in which he admitted their relationship was "unworkable".

In the same interview, Gillett said he had threats from Liverpool supporters urging him not to sell to Hicks. He criticised his co-owner for increasing supporter antipathy through his decision to disclose that the club had secret talks with Jürgen Klinsmann last year over replacing Benitez. That revelation has only served to raise Benitez's standing with fans and diminish Hicks. The team still have the prospect of a third Champions League final in four years although there must now be serious uncertainty about how the manager will be able to plan for the summer.

Parry was the driving force behind the American takeover last year and is now attempting to push through the DIC takeover. Where once there appeared to be a number of different cliques forming at the club, from the owners to Benitez, it is now evident that there are major blocs. In one corner is Gillett, Parry, Benitez and the former chairman, David Moores, who believe that the club would be better in the hands of DIC. In the other is Hicks who is fighting on alone but determined to prevent the club falling into the hands of DIC.

It is a sign of just how confident Parry is that Hicks can be seen off that the Liverpool chief executive has brushed off the demand for him to resign. "It is my intention to remain focused on the job of serving Liverpool Football Club to the best of my abilities at this very important time of our season," he said in a statement yesterday. Although not universally popular among Liverpool supporters, Parry was a close ally of Moores who sold to the Americans on the basis that the club needed a much wealthier backer to compete with the rest of the Premier League's big four.

Respected as a football administrator, and with a uniquely laid-back approach, Parry is expected to ride out this storm unless, of course, Gillett has an unexpected change of heart and sells out to Hicks. With that unlikely it seems that this remarkable stand-off will continue.

Anfield's leading men: Key players in Liverpool saga

Rick Parry (Chief executive)

Occasionally derided by fans but quickly becoming a martyr in the Gillett v Hicks battle. He was the Premier League chief executive until given Liverpool job by David Moores in July 1998. Urged the former Liverpool chairman to sell to the Americans rather then DIC last year.

George Gillett (Co-owner)

Regarded with less vitriol by Liverpool fans than his erstwhile business partner Hicks. Wants to sell to DIC for a tidy profit. Owns Montreal Canadiens, NHL ice hockey team. Affable, but man-of-the-people style disguises a ruthless edge. Was not afraid to play on Hicks's unpopularity with fans in recent interview.

Tom Hicks (Co-owner)

Texan thought to be worth more than £500m, owns Texas Rangers baseball team. Regarded as the villain of the piece by Liverpool fans because of refusal to sell to DIC and his attempts to replace Benitez and Parry. So unpopular he has not recently attended Anfield. Un-likely to be intimidated.