Aston Villa have rejected Liverpool's latest offer for Gareth Barry, despite the player indicating his desire to move to Anfield.

The ongoing transfer saga surrounding the midfielder looks no closer to a resolution after Villa rebuffed an improved bid from Liverpool late last night. The offer, Liverpool's third for Barry, was thought to be close to £15 million, however the Birmingham club remain determined the price should be closer to £20m.

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

Martin O'Neill, the Villa manager, is resigned to losing his captain, accepting his desire to play Champions League football next season, but he remains adamant that the 27-year-old will only be allowed to leave on his terms.

Liverpool have already tabled two bids for Barry: a £10m deal involving what O'Neill described as a "mish-mash of players" and a £12m cash offer.

Doug Ellis, the former Aston Villa chairman, believes O'Neill is right to demand Barry leaves the club for no less than

Ellis, who was at the helm when Villa paid Brighton £500,000 for Barry, said: "If Gareth goes, and I fear he will as Steven Gerrard has been begging him to do so - then right now I wouldn't sell him for less than £15m.

"I am proud of the fact that we took a bit of a gamble and paid £500,000 for him and Michael Standing ten years ago.On the financial side at least, paying half a million for Barry and selling him for £20 million - hopefully if that is the sale price - is not a bad deal.

"If I was advising Liverpool, I would say 'dig deep' because he is such a good asset.' It will be a big loss to Villa and I would fight like hell to keep him - but of course I am no longer there."

"He sees the Champions League football as something that he should be in. His friend is Steven Gerrard, they room together for the internationals and as such he is being persuaded to go there. But, like I said, it will be a big loss to Villa should he go."

Barry, who signed a three-year contract in August, is unlikely to force the issue by making an official transfer request, but having told Villa privately he wants to leave, he is approaching the point of doing so publicly. Barry's stock has never been higher and after a stop-start international career he has been one of the big winners under Fabio Capello, with the Italian valuing his hard work and intelligence.