Roy Hodgson tops Liverpool's list

• Kenny Dalglish heads search for new manager

• Inter may follow up initial interest in Spaniard

Roy Hodgson Liverpool are confident their top target Roy Hodgson will accept the challenge of replacing Rafael Benítez. Kenny Dalglish is to lead the search for Rafael Benítez's successor as Liverpool manager, with Roy Hodgson and Martin O'Neill among the frontrunners.
Benítez accepted a severance payoff worth a maximum £6m from Liverpool's co-owners, Tom Hicks and George Gillett, today, to end a six-year reign that polarised opinion at Anfield.

Dalglish, the revered former Liverpool player and manager and now club ambassador, will assist the managing director, Christian Purslow, in the pursuit of a manager who can restore Liverpool's Champions League status on a limited budget and convince leading players such as Steven Gerrard, Fernando Torres and Javier Mascherano not to quit Anfield.

Despite the uncertainty surrounding Liverpool over players and the future ownership of the club, with Hicks and Gillett struggling to find a buyer willing to meet their £600m-£800m price, Anfield officials insist they will not rush a decision and can install a long-term appointment.

The leading candidate at present is Hodgson, who has many admirers at Anfield with his European pedigree and recent success at Fulham. The 62-year-old former Internazionale, Switzerland and Blackburn Rovers manager is on a 12-month rolling contract at Craven Cottage and Liverpool are confident he would be receptive to their advances, despite insisting he was fully committed to Fulham after last month's Europa League final defeat to Atlético Madrid.

Another Premier League manager under consideration is O'Neill, although any approach to Aston Villa would be fraught with complications for Liverpool. The Villa owner, Randy Lerner, recently announced the 58-year-old would not be leaving the club for Anfield or any other destination this summer and the Midlanders' stance has not altered. The Villa board is also believed to be confident that problems on and off the field at Liverpool would dissuade O'Neill from starting anew on Merseyside.

Dalglish himself has also been mooted as a possible interim appointment, 19 years after the stresses of the job prompted his departure as Liverpool manager, but it is understood moves for Hodgson and O'Neill take precedence over what would be a remarkable return for the Scot.

Benítez's departure was confirmed this afternoon following a further round of talks between Liverpool directors and the Spaniard's agent, Manuel García Quilón. The position of the former Valencia and now Liverpool manager was made untenable yesterday when, following negotiations between Benítez and the new club chairman, Martin Broughton, the Anfield board offered him a compromise fee of £3m to leave with immediate effect.

Under the terms of the five-year contract signed only last March, Benítez would have been entitled to £16m if sacked by Liverpool this summer. Instead, he agreed to go with an initial £3m severance payment plus the guarantee of a further £3m spread over future dates. It is unknown whether the outspoken critic of the financial restrictions in place at Anfield has signed a confidentiality clause as part of the deal, but Benítez is now free to take a job without Liverpool demanding a compensation fee.

Benítez, an adversary of José Mourinho during their time in the Premier League, could replace the new Real Madrid coach at Internazionale. The president of the reigning European champions, Massimo Moratti, today insisted: "There is nothing new to add at this stage." An Inter director, Gabriele Oriali, however, admitted Benítez is under consideration. "Benítez has a certain affinity with Inter fans. He is very appealing to us," Oriali said. "He has already given us great joy, namely the 2005 Champions League win against Milan. Who does not remember Istanbul? We like him a lot. But the decision will be made by our president, Massimo Moratti."