By Alan Nixon

Liverpool are ready to let Kenny Dalglish carry on as manager – but with a vastly-reduced budget for signings.

Dalglish stays: Liverpool boss won't be axed... but his budget will

The Kop chief spent £108million on just six players, including Andy Carroll, Luis Suarez, Stewart Downing and Jordan Henderson, in 2011.

But it has been made clear to him that those days are over and he has now started to seek bargain signings instead – including free agents.

Dalglish delivered the Carling Cup in February and got to the FA Cup Final but failed to qualify for the Champions League, despite that huge outlay.

The club’s American owners, Fenway Sports Group, have decided to rein in the huge spending – a move which could actually benefit Dalglish, who is now more likely to give some of last year’s big-name signings a second crack at proving themselves rather than sign replacements.