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| Dani Ceballos is thought to be on the radars of Real Madrid and Liverpool |
LIVERPOOL could face competition from Real Mardid if they want to sign Real Betis star Dani Ceballos
The Reds are understood to be interested in the young midfielder and were reported to be preparing an £8.5million swoop.
However, Spanish publication Cadena Cope claim the Spanish giants are now the frontrunners.
Ceballos will be loaned back to Betis immediately but Real are keen to tie him down as soon as possible.
Liverpool's potential deal would have seen him arrive at Anfield next June and the Reds are understood to have arranged a house and car for the youngster to make the transition as smooth as possible.
Arsenal are also believed to retain an interest in the Spain Under-21 international.
The 19-year-old has been compared with compatriot Cesc Fabregas and was a mainstay for Betis as they won promotion to La Liga from the Segunda Division last term.
He has been capped at various youth levels for his country and was part of the academy at his club's cross-town rivals Sevilla.
Liverpool might now turn their attention to Real's Asier Illarramendi.
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