Alonso has been vital for Liverpool since his arrival in August 2004

The 24-year-old said: "As far as I am concerned there is no truth in the story at all. I am focused on my job here at Liverpool.

"I have had no contact with Real Madrid and I am confident I am going nowhere. I want to stay at Liverpool."

Manager Rafael Benitez has also confirmed Alonso is not for sale.

Alonso added: "You have to be flattered when you are the subject of this speculation but I want to stay at Liverpool."

Benitez said: "There has been no truth in stories about Xabi Alonso.

"We have had no official contact and for sure he is staying here, we do not want to sell him."

Instead, Benitez wants to sign players and added: "We are still looking for new players, everybody knows what we are looking for now better than me!"

The Reds are expected to make a bid for Birmingham right-winger Jermaine Pennant, 23, in the near future as they look to add to the new signings of Craig Bellamy, Fabio Aurelio and Mark Gonzalez.

Darren Potter and Paul Anderson were used on the right in the friendly 1-0 win against but Benitez wants more experience in that role.

"I am happy with the young players and they need more experience before being thrown in, that's why we will continue to work in the transfer market," he stated.

Meanwhile, the club's chief executive Rick Parry has admitted that Liverpool are monitoring two Spanish youngsters - Fran Merida, a teenage midfielder from Barcelona, and Real Madrid's Esteban Granero.

"We are aware of both players but talk of moves is wide of the mark," said Parry.