Barry staying at Villa after Liverpool run out of time

Gareth Barry's future at Aston Villa remained in doubt last night after his hopes of a move to Liverpool were extinguished.

A statement on Villa's official website last night read: "Aston Villa can announce that Gareth Barry will be staying with the club following the interest from Liverpool over recent months. During discussions in the past few days, a final deadline to conclude this episode was set that all parties were aware of and agreed to. This deadline has now passed and so Gareth will remain with Villa."

Talks between the clubs failed to deliver a way through an impasse in which Liverpool have, despite tabling four bids, been unable to cede to Villa's £18m demand. Liverpool's willingness to budge further will have been further diminished by their £19m outlay on Robbie Keane on Tuesday.

Martin O'Neill, the Villa manager, said two weeks ago that he was unwilling to continue preparations for the new season with uncertainty about Barry's availability. He appears to have taken the initiative on the issue, and imposed a deadline on discussions, but with Liverpool needing to sell either midfielder Xabi Alonso, or several players of lesser value, to raise the cash to buy Barry, any talks were doomed to fail. So Barry may concede that it was O'Neill who has brought the curtain down on his hopes of leaving Villa Park.

The England international has the prospect of a new £60,000-a-week deal at Villa Park, with the promise of a lucrative testimonial after 11 years' service. The 27-year-old is understood to have been told by O'Neill that he can walk away next summer if Villa fail to improve on last season's sixth-place in the Premier League.

Privately, Barry remains distraught about the saga, the light in which it has cast him and what he considers to have been a breach of an understanding he insists that he and O'Neill came to when the Irishman arrived at the club two years ago – that O'Neill would not stand in his way if the chance of Champions League football arrived and Villa had not been able to deliver it.

Barry's spirits were lifted by the reaction he received from Villa fans when he came on as a substitute in their Intertoto Cup victory against Odense on Saturday, but the divisions with O'Neill which the issue has created will be harder to shake off.

The language he used when he was critical of O'Neill in a newspaper article was incendiary: he accused him of finding time to be a pundit at Euro 2008 but not to speak to him about his future. In response, O'Neill fined him and told not to report pre-season training a fortnight ago. Villa were legally obliged to take him back into training but Barry was subjected to "Judas" chants in a pre-season friendly at Walsall last week.

Rafael Benitez had not entirely given up hope of getting Barry though the Liverpool manager admitted, following the signing of Keane from Tottenham Hotspur, that he would have to sell before being in a position to buy.

Barry is now resigned to start the new season in the Midlands, with Arsenal the only club likely to meet his desire for Champions League football and willing to pay Villa's asking price.