News of the World claim City are keen on signing midfielder Steven Gerrard and striker Fernando Torres in the summer.
Liverpool owners, Tom Hicks and George Gillett, must come up with £100million by the end of March to settle loans.
The owners could wipe out the problem by selling Torres to City in a £100million deal and boost Rafa Benitez’ transfer kitty by selling Gerrard for £40million.
