By North-west correspondent Alex Stevens
Jerome Sinclair is in advanced talks to join Watford in the summer, Football Insider sources understand.
The Hornets failed with a bid to tempt the Merseysiders into selling the teenage forward in the January window.
But a source close to the situation has told Football Insider that Watford have made a fresh attempt to entice the 19-year-old through talks with his representatives.
All parties are confident an agreement can be reached for Sinclair to move to Vicarage Road when the transfer window opens.
The teenage striker’s contract expires at the end of the season and he has rebuffed attempts from the Merseysiders to extend his deal.
There has also been interest from clubs in Spain and Italy, as well as Aston Villa but Watford are now leading the race for Birmingham-born Sinclair, who joined Liverpool when he was 14.
Liverpool had placed a £2million valuation on the striker in January but, even though he is out of contract in the summer, the club are in line for a compensation fee under FA rules as the player is aged under 24.
In total, Sinclair has made four appearances for the first team and scored just the one goal, in the FA Cup third-round 2-2 draw against Exeter in January.
In other Liverpool transfer news, reserve keeper Adam Bodgan will be allowed to leave Merseyside in the summer following a series of high-profile blunders.