Defiant Hicks rejects £400m takeover bid by persistent Arabs

It is understood Liverpool's co-owners Tom Hicks and George Gillett privately expressed disdain at the valuation, though it will allow them both to walk away with a £25m profit.

DIC, the private equity investment arm of the Dubai government, insisted there was a midnight deadline on their offer but the Americans feel there is room for manoeuvre so the bid has not officially been turned down.

Yet the financial package, believed to have been tabled a week ago, is thought to be insufficient and DIC must decide how far they can stretch their valuation of Liverpool.

It understood that they were considering a new offer late into the night.

Despite Gillett's willingness to sell, his partner Hicks wants to hang on at Anfield and he will take considerable persuading if he is to cash in the investment he made when the pair bought the club in March 2007.

The American partners, who have a strained relationship, have to give each other first refusal if either wants to sell.

Hicks is thought to be close to raising the funds to buy out Gillett and take sole control but, even if he succeeds, DIC have indicated that they will not go away.

Headed by Sheik Mohammed bin Rashid al Maktoum, the world's fifth richest man, DIC have pursued Liverpool for almost two years and have never lost interest since losing out to the Americans in the battle for ownership of the club.

Hicks and Gillett bought Liverpool for £218.9m and that figure included an agreement to pay off about £45m of debt and a pledge to build and finance a new stadium.

The pair refinanced with a £350m package from two banks on January 25 but the package left the 18-time English champions with a debt in the region of £105m.

The Americans have encountered resistance among Liverpool supporters over the new stadium plans — which have had to be modified — and as well as the treatment of manager Rafael Benitez.

Given this background, Gillett has been willing to sell up for some time and it is believed he has been in regular contact with negotiators from DIC. He was in talks with their lawyers yesterday.

Hicks, however, still believes he can make a success of a venture that was launched with such fanfare.

The situation for Hicks is more complicated and DIC may have to accept that he cannot sell at the moment because he is raising money in the United States by floating his entire sports empire — Dallas Stars, Texas Rangers and Liverpool.

The latter is the jewel in the crown and key to raising further capital.

There are likely to be more demonstrations at Anfield tonight as Benitez and his players face a vital Barclays Premier League clash with a West Ham side thrashed 4-0 by Chelsea last weekend.

With the race for the crucial fourth Champions League qualifying place hotting up, Benitez knows his team can not falter.

He said: "That fourth position is always important and if we win this game we are there and everything will depend on us."

Benitez has also revealed that the club are confident striker Peter Crouch and defender Sami Hyypia will agree new contracts in the summer.