However, they believe they can land the former player before the transfer deadline for as little as a £4m down payment.

It is understood the 25-year-old and his advisors are not interested in Newcastle’s club record for the England striker, leaving the way open for Liverpool to end weeks of speculation by declaring their hand.

Liverpool manager Rafael Benitez will insist the Anfield club do not pay over the odds for a player they were forced to sell to Madrid for just £8m last summer, when Owen made it clear he would not sign a new contract and left Liverpool to get the best price they could.

Real Madrid were able to sign the striker for a knock-down price because Liverpool were unwilling to allow Owen to wind down his contract and leave for nothing as Steve McManaman did when he moved to the Spanish giants.

It is understood Liverpool have already had preliminary talks with Madrid and Owen’s advisors, and believe they can secure the player for around £10m.

Liverpool are still owed £4m from the deal which took Owen to Spain, so that would instantly be cut from any asking price.

It is thought the Merseysiders would be happy to then pay a £4m down payment and then a further £2m in instalments over the length of a four-year contract for Owen.

Owen’s return, which could be confirmed while he is with England preparing for next Saturday’s World Cup qualifier with Wales, would delight his international colleague Steven Gerrard.

Gerrard has said: “Fingers crossed. It’s obviously up to the Liverpool manager but everyone knows what I want.”

Liverpool chief executive Rick Parry said: “There has been plenty of speculation and we will see next week. It’s always encouraging when a player says he wants to come to Liverpool.”