The Reds' improved offer, reportedly in the region of £15million, was turned down by the midlands club late on Wednesday night.

A Villa spokesman said: "The offer was a slight improvement on a previous bid but our position on the issue remains unchanged and Liverpool have been informed."

Liverpool's pursuit of England midfielder Barry, 27, has created a rift between manager Rafael Benitez and Villa counterpart Martin O'Neill.

O'Neill was incensed that talks between the pair were leaked last month and has since made clear his determination to hold on to the club's longest-serving player.

O'Neill and Villa owner Randy Lerner have attempted to convince Barry his future lies at the club he joined 11 years ago.

But the player has hinted he wants to play Champions League football, a dream Liverpool would be able to fulfil immediately.

Barry said earlier this month: "You only have to look at the England squad to see the amount of players who get in the squad and start the games - the majority play in the Champions League.

"That's all about the decision that will have to be made by myself. Liverpool are in the Champions League and Villa are trying to push for that. That's all part of my decision if a bid gets accepted.

"Just to think about it makes it a tough decision. There's so much to lose at Aston Villa. I've been there for 10 years, got a good rapport with the fans, I'm captain [and have a] great relationship with the manager."