By Germany correspondent Hans Matthias

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Mario Gotze has delivered a huge blow to Liverpool by revealing his intention to stay at Bayern Munich and fight for his place next season.

The 23-year-old World Cup winner has plummeted down the pecking order at Bayern under Pep Guardiola and was widely expected to leave this summer with one year remaining on his contract.

But Gotze has decided to stay in Munich following talks with new manager Carlo Ancelotti.

“I look forward to the new season in Munich and will do everything possible to be in top shape for my first training session under Carlo Ancelotti,” Gotze said, as quoted by German publication Bild.

Liverpool have been leading the race to sign Gotze and have been confident of wrapping up a deal of around £20million.

Manager Jurgen Klopp is close to Gotze after bringing him through the ranks at Borussia Dortmund and help nurture the playmaker into one of the most coveted young players in Europe.

Klopp has been keen to tie up a swift transfer for the Germany international and the club were hopeful it could agreed within the next few days.

But the chances of Gotze moving to Anfield this summer now appear slim.

The World Cup winner’s season has been continually interrupted by injuries and Gotze has struggled to convince Guardiola he deserves more than a spot on the bench in recent weeks.

The Spanish boss opted to leave him out of both legs of Bayern’s Champions League semi-final showdown defeat to Atletico Madrid.

But Gotze’s pedigree is without question and is well known to Klopp, who brought him through the ranks at Dortmund before the player’s departure to Bayern in 2013.

The man who struck the winning goal in the 2014 World Cup final scored 31 goals and supplied 44 assists in 116 Dortmund matches. He has been even more prolific at Bayern, scoring 36 goals in 114 matches.

Liverpool are keen to get their transfer window dealings done quickly, preferably before the first ball is kicked at the European Championships in June, and have already agreed the signing of one player from the Bundesliga.

Goalkeeper Loris Karius has arrived on Merseyside to complete a £4.7million transfer from Mainz to Anfield.

In other Liverpool transfer news, the Reds are ready to make their Bundesliga raid into a hat-trick with interest in this German defender.