Nicolas Anelka's exit from Liverpool could result in a new strike partner for Shaun Goater.

The French striker has been on loan at the Reds but the Premiership runners-up have opted not to sign him permanently.

That could open the door for Manchester City boss Kevin Keegan who was rumoured to have expressed an interest in taking on the controversial 23-year-old international.

"After a lot of thought we've decided not to make Nicolas Anelka's move from Paris St Germain a permanent one," a Liverpool statement said yesterday. "This was a difficult decision and we know that Nicolas will be very disappointed, but the manager has always had to do what he thinks is best for the club and the development of the team.

"We finished the season as runners-up and want to pay tribute to the part Nicolas played in that achievement during his loan spell at Anfield.

"Everyone at the club now wishes him well for the future."

Anelka, who scored five times in 22 appearances for the Anfield club, joined Liverpool on loan after the club sold former captain Robbie Fowler to Leeds United.

A permanent move to Liverpool had looked likely for Anelka after PSG vice-president Alain Cayzac said last week that the two clubs had reached a formal agreement.

Media reports say the French side put a ?12 million price tag on the player's head after indicating that they did not want him back following a series of disagreements.

Anelka, who has been left out of France's World Cup squad, also expressed his desire to complete the move, saying: "I'm happy at Liverpool and would like to stay here - not just for a year or two but for a long time."

Yesterday's Manchester Evening News reported Keegan was set to move in.

"It is expected that Keegan will now renew his efforts to entice the Frenchman to Maine Road, having received backing from the board to make a ?13m bid and meet Anelka's wage demands," the newspaper reported.

Meanwhile, City have completed the ?4 million purchase of French defender Sylvain Distin from PSG.

The 24-year-old signed a four-year deal to become Keegan's third defensive buy in a week, following the arrival of Dane Mikkel Bischoff and Dutchman Tyrone Loran.

Distin, a left-sided defender, was on loan at Newcastle United last season, playing 34 games, and was keen to stay in English football.

"We looked closely at bringing Sylvain to Maine Road before he went to Newcastle but at that stage we were in the First Division and he was understandably looking for a Premiership deal," City's director of football Dennis Tueart said.

"When it became clear that Newcastle were not going to take up their option on the player, Kevin moved very quickly and we are delighted to have Sylvain on board. He is a powerful, quick athlete who has already proved himself at the highest level.

"What is vitally important, too, in the strategy for team building, is that he is a left-sided central defender who is a like-for-like swap for Stuart Pearce who has now, of course, retired."