New owners turn to Dalglish in search of strong leadership

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The Liverpool owner John W Henry spoke of Kenny Dalglish being among the club's top three managers of all time after the Scot replaced the departed Roy Hodgson until the end of the season.

Dalglish, 59, who has been working as a club ambassador, was due to arrive back from a cruise in the Middle East last night and will take charge for the FA Cup third-round tie at Manchester United this afternoon. He takes charge 19 years and 11 months since he resigned in 1991, having guided Liverpool to the League and FA Cup Double in 1986, as well as two further League titles and an FA Cup.

The former Liverpool manager, who wanted to replace Rafael Benitez in the summer, has not taken charge of a team since his three-month spell as caretaker at Celtic after John Barnes's dismissal in February 2000.

Although he was overlooked by the previous board in the summer, Dalglish's name has regularly been sung by Liverpool fans as a point of protest against Hodgson since the 2-1 home defeat to Blackpool in October.

Dalglish is the bookmakers' favourite to be Hodgson's permanent replacement and Frank Rijkaard, Martin O'Neill, Owen Coyle, Ralf Rangnick, who left Hoffenheim last week, and Porto's 33-year-old coach Andre Villas-Boas have all been linked with the job while Marseille's manager Didier Deschamps ruled himself out last week. Fenway Sports Group were thought to be looking for a young manager to lead their "project" along with director of football strategy Damien Comolli, but it remains to be seen what will happen in the summer if Dalglish impresses.

"We are grateful for Roy's efforts over the past six months, but both parties thought it in the best interests of the club that he stand down from his position as team manager," Henry said in a statement. "We are delighted that Kenny Dalglish has agreed to step in and manage the team for the FA Cup tie at Old Trafford and for the remainder of the season.

"Kenny was not just a legendary footballer, he was the third of our three most successful managers – three giants. We are extraordinarily fortunate and grateful that he has decided to step in during the middle of this season."

Hodgson's six-month reign was ended yesterday morning after several months of speculation about his future and defeats to Wolves and Blackburn in their previous three matches. He took training at Melwood yesterday morning as usual before his departure was finalised.

In the wake of the 3-1 defeat at Ewood Park, after which he refused to answer questions on his future, his regular Friday press briefing was cancelled, although he did preview the Manchester United match in interviews with official club media.

He signed a three-year contract when he took over a club that had finished seventh, and was not even able to spend the money he brought in from transfers. Now Liverpool are just four points above the relegation zone and have lost nine of their 20 Premier League matches.

Although the club's owners had hoped the former Fulham manager would make it through to the end of the season, unprecedented criticism from supporters forced their hand.

He has been criticised for the signings of Christian Poulsen and Paul Konchesky, although Raul Meireles has helped to fill the void left by Javier Mascherano, and perceived negative tactics as well as his honesty have often got him into trouble.

Hodgson admits that the past six months have been among the toughest of his managerial career but he was frustrated not to have been judged after this month's transfer window and hinted that not all of the players had been on his side.

"Liverpool is one of the great clubs in world football," Hodgson said. "I have, however, found the last few months some of the most challenging of my career.

"I am very sad not to have been able to put my stamp on the squad, to be given the time to bring new players into the club in this transfer window and to have been able to be part of the rebuilding process at Liverpool."

The chairman Tom Werner hopes that Dalglish will guide Liverpool away from trouble in the remainder of the campaign. "No one who cares for this great club has been happy with the way this season has unfoldedand we have examined options and considered at length what is best for us going forward," Werner said.

"Kenny will bring considerable experience to the position and provide management and leadership for the rest of the season."