Gareth Barry has been forced to accept that his immediate future lies with Aston Villa after Liverpool failed to meet yesterday’s 5pm deadline to match Martin O’Neill’s £18 million evaluation of the England midfield player.

The Villa manager expressed his relief and delight that Barry would not be moving to Anfield after a tortuous transfer saga that has rumbled on since May, although sources close to Liverpool were still claiming that the player was dissatisfied. Villa have not received a formal offer from Liverpool since June, when a cash bid of £13 million was rejected, and consider the matter finished.

Barry was integral to the discussions that took place this week, during which all parties agreed that the protracted saga needed settling. Rick Parry, the Liverpool chief executive, spoke again yesterday morning with Randy Lerner, the Villa chairman, indicating that he hoped to make an offer by the deadline, but that was the last communication between the clubs.

Barry, who has two years remaining on his present contract, is set to be rewarded with a 50 per cent pay rise to about £70,000 a week in a new deal that is likely to include a get-out clause that could lead to him leaving for a vastly reduced fee should Villa not meet mutually agreed targets. After ten years at the club, he will be reinstated as captain and can arrange a testimonial as he concentrates on leading Villa into the Uefa Cup next month.

“We’re all absolutely delighted that Gareth will be staying at Villa Park and relieved to find a resolution and closure to the saga,” O’Neill said.

“We had a very positive meeting on Monday when it was agreed between Gareth, his agent [Alex Black], Mr Lerner and myself that a deadline should be communicated to Liverpool to finally resolve the situation. Liverpool were informed and that deadline came and passed. Now we can all look forward to the coming season with relief, anticipation and ambition.”

Rafael Benítez, the Liverpool manager, refused to be drawn on the Barry situation after last night’s friendly match away to Villarreal in Spain that ended 0-0, saying: “I would prefer to concentrate on the game and my squad.” He was more forthcoming about the debut of his £20.3 million summer signing, Robbie Keane. The former Tottenham Hotspur striker led the attack in the first half and demonstrated sufficient energy and ambition in what was otherwise a pre-season stroll to satisfy his new manager.

“Robbie Keane did well, he had every chance to score but could not manage a goal,” Benítez said. The Spaniard has indicated that he will play Keane either alongside Fernando Torres or behind the Spain striker in a 4-2-3-1 formation, but on this occasion, with Torres starting on the substitutes’ bench, he played the Ireland forward alongside another newcomer, David Ngog, the £1.5 million signing from Paris Saint-Germain.

Keane looked relatively sharp and came closest to opening the scoring in the 33rd minute when he shot over from the edge of the penalty area.

Liverpool’s four Euro 2008 winners with Spain — Torres, Xabi Alonso, José Manuel Reina and Álvaro Arbeloa — paraded the European Championship trophy before the game, inevitably drawing far more interest from the home crowd than did the appearance of Keane. The sight will have struck a painful chord with Steven Gerrard, the Liverpool captain, after England’s failure to qualify for the tournament.

Gerrard was making only his second appearance of pre-season after suffering a groin strain at the club’s training camp in Switzerland and, like Keane, left the game at half-time as Benítez rested his senior players before the next friendly, away to Rangers on Saturday.