Gareth Barry wants to see Martin O'Neill's shopping list before he commits his long-term future to Aston Villa. The England midfield player is a £12million transfer target for Liverpool and, while he would prefer to follow up his international graduation by winning honours at Villa Park, he admits that he needs convincing that the manager can cash in Randy Lerner's multimillion-pound backing for an influx of top-quality newcomers who could help to establish Villa as regular challengers for silverware.

On the eve of the derby match against Birmingham City, and when victory would leave Villa three points behind Everton in the chase for a Uefa Cup spot before next week's showdown at Goodison Park, O'Neill confirmed that he wants to offer a new deal to Barry, who has two years to run on his contract. It is ten years since the 27-year-old made his Villa debut, but, more important to him than a testimonial match or a rise from his £47,000-a-week salary, Barry wants to know that the club can fulfil his ambitions.

O'Neill opened talks with Barry's advisers - “I got my retaliation in first,” he said - before this week's reports that Rafael Benítez, the Liverpool manager, wants to sign the Villa captain, who was linked with Chelsea in October. “It's natural that someone who's established himself in the England set-up and has been playing brilliantly for us for so long would be a possible transfer target,” O'Neill said. “Obviously, I desperately want to keep Gareth at the football club - as do the other players, the chairman and the supporters. We're hoping to build something ourselves here.

“We're looking for this club to be challenging for honours in the not too distant future and the best way to start achieving that is by keeping our best players here.”

Barry was on the verge of leaving Villa two years ago before O'Neill succeeded David O'Leary and persuaded him to stay, suggesting he could improve him as a player. In front of the club's biggest attendances in half a century, top-quality players such as Ashley Young, Gabriel Agbonlahor and John Carew have helped to lift Villa from eleventh in the Barclays Premier League last season to challenging for fifth. Barry's form is reflected in the 17 goals he has scored under O'Neill and the eight caps he has won this season. But the Villa squad is thin on numbers and Barry has seen them on the verge of making the step up before.

“It's flattering being linked with some big teams. It can help breed confidence towards your game but my focus is on the Birmingham game,” he said. “Every player wants to play at the highest level and I want to play Champions League football at some stage in my career.

“We will see where we are at the end of the season. Martin has not told me his thoughts at the moment; what we are looking to achieve, what players we are hoping to buy in, whether the manager himself thinks we can move to that next level.

“I am a hundred times happier here than I was two years ago. That's a big factor. Everything the manager promised two years ago is coming true. I am not sure how fast the manager had ideas of challenging for Europe, but two years down the line we find ourselves with a chance of finishing fifth and that's an improvement in my eyes. He has stuck to his guns with what he said.

“It's about medals. I am 27 now. People can ask me what you've won and what you've achieved. I can say that I've achieved a lot of games, played in some big games for my country. You want to finish with at least one piece of silverware in your cabinet if not more. The ideal situation would be to do it at Aston Villa. There have been glimpses before but you have to be competing year in, year out.”