Manchester City will only revive their interest in Virgil van Dijk if Southampton "hugely reduce" their fee expectations, say Sky sources.
The Dutch centre-half is hot property this summer with Pep Guardiola identifying him as a top target as he looks to shore up his defence, though City have been concerned about his price.
Southampton's captain revealed Liverpool was his preferred destination over Chelsea and City, and it seemed he was on his way to Anfield with SSN HQ reporting they were prepared to break their transfer record to land him.
However, the transfer saga involving Van Dijk took a twist on Wednesday night when the Reds ended their interest as Jurgen Klopp apologised to Southampton for their conduct in pursuit of the defender.
Sky sources reported on Tuesday that the Saints had reported Liverpool to the Premier League and asked them to investigate an alleged illegal approach.
The Premier League have looked into the matter, but we understand it is unlikely they will take any action against Liverpool if Southampton accept their apology and withdraw their concerns.
Klopp, who is taking a central role in summer recruitment, said: "Liverpool would like to put on record our regret over recent media speculation regarding Southampton and player transfers between the two clubs.
"We apologise to the owner, board of directors and fans of Southampton for any misunderstanding regarding Virgil van Dijk. We respect Southampton's position and can confirm we have ended any interest in the player."
SSN HQ revealed in April that Van Dijk was one of six players being targeted by City and it was understood last week that Guardiola remained "extremely interested" in the player with initial enquiries having already started.
Southampton manager Claude Puel and the club's chairman Ralph Krueger have previously insisted Van Dijk will not be allowed to leave St Mary's in the summer.
The 25-year-old was rewarded with a new six-year contract in May 2016 and was named Saints captain following the departure of Jose Fonte to West Ham in January.
Van Dijk, who joined Southampton from Celtic in September 2015, made 30 appearances last season before suffering a season-ending ankle injury in the 3-0 win over Leicester in January.
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