Liverpool's Spanish manager Rafael Benitez has agreed a new four-year deal with the club that will extend his stay on Merseyside by an extra year to 2010, media reported on Thursday.

The Guardian reported that Benitez's agent Manuel Garcia Quilon spent Wednesday in talks with Liverpool chief executive Rick Parry hours before their Premier League match with Fulham and the new contract is likely to be signed on Thursday.

The newspaper said the deal was worth around 10 million pounds to Madrid-born Benitez, 45, who had been linked with a return to Spain.

Media speculation in England and Spain had centred on Real Madrid heading the queue for the services of the man who steered Liverpool to Champions League success last year.