With Kenny Dalglish coming under increased pressure from the Liverpool owners to do more with their money, the Kop boss is looking for an injection of new blood in a bid to make 2012/13 a more successful season (The Sun).
Serie A club Fiorentina recently rejected a £8 million bid from Bayern Munich for Vargas, leaving the way for Liverpool to enter the race for the Peruvian midfielder.
Fiorentina are also said to be interested in signing 18-year-old Spaniard Jesus Fernandez Suarez on loan from Liverpool.
Argentina’s Suarez is a £20m target of Dalglish but former Liverpool flop, Milan Javanovic, has urged his current Anderlecht team-mate not to make the move to Anfield (The Sun).
“I shed lots of tears in England,” the 28-year-old said. “I felt unhappy every day over there.
“I have advised Suarez not to move to Liverpool. They’ll throw a lot of money at him but he should opt for Italy.”
In a bid to free up some cash for those signings, Dalglish could be set to wield the axe on some of his current mis-firing squad, with Andy Carroll set to be one of those set to go (Daily Mirror).
Carroll set a new club record at Liverpool when he was signed for £35m from Newcastle in January 2011 but he has failed to consistently perform and could be set for a cut-price departure in a bid to secure a new club.
Over in Manchester, Roberto Mancini has demanded more money from City owners so he can strengthen the squad that has been found wanting at the tail-end of this season.
Mancini has already spent £210m in the past two years but is planning a £37m swoop for Lille duo, striker Eden Hazard and left-back Lucas Digne (The Sun).
“We lost Yaya and Kolo Toure for the African Nations Cup, had some injuries and lost Vincent Kompany, Joleon Lescott and Sergio Aguero in the last two games,” Mancini said.
“Maybe next year if we lose two important players, we can have another two good players and we can change.
“We finished our job to build a strong team. Now it’s enough to put in three or four more players with a strong mentality.”
Still at City, Mancini has warned Tottenham that they will face a fight if they are to sign Emmanuel Adebayor on a permanent deal this summer (The Sun).
Adebayor has been on loan at Spurs this season and while Mancini is happy to let the striker go to White Hart Lane permanently, he has also warned Spurs boss Harry Redknapp that other European clubs are interested into the Togo international.
Sunderland are set to put in a bid for City winger Adam Johnson (Daily Star).
The 24-year-old joined City for £7m two seasons ago but has failed to convince Mancini of his worth; the Italian accusing Johnson of not working hard enough in matches.