RAFAEL BENITEZ must decide whether to call a halt to contract negotiations or back down on his demands as a fresh power struggle develops at Liverpool.

Anfield co-owners George Gillett and Tom Hicks have been in talks with Benitez’s representatives over a new long-term deal for the manager.

Although agreement has already been reached over the length and salary of the contract, Benitez wants total control over transfers and a more prominent influence on the Academy set-up.

However, American duo Gillett and Hicks are unwilling to grant the Spaniard such wide-ranging powers, leading to the present impasse.

Benitez admitted on Friday that his agent was “disappointed” at the lack of progress in negotiations, which began in November.

And now the Liverpool manager faces the choice of either reaching a compromise agreement or withdrawing from talks, with 18 months remaining on his current deal.

One good piece of news for Benitez is that the Football Association will not take any action over his attacks on Manchester United manager Sir Alex Ferguson during the past few days.

Reports yesterday that Emile Heskey has signed a pre-contract agreement to move to Liverpool at the end of the season are wide of the mark as such deals are prohibited between clubs in the same country.

But Benitez remains an admirer of the Wigan striker, who becomes a free agent in the summer.

Meanwhile, Daniel Agger’s agent has reiterated the ball is in Liverpool’s court with regards the defender’s contract talks.