The Anfield hierarchy has blinked first in the Mexican stand-off by offering their 50-year-old manager a compromise compensation deal to quit the club. The offer was made in a conference call to Benitez, who is in Sardinia. It is believed Sammy Lee has been put in temporary charge of team matters.
The Spaniard believed for some time he had the whip hand in his dealings with the board, but the negotiations about his future became a vicious circle - although he did not realise just how vicious it was to become. In a vote of no confidence, the Liverpool board approved a proposal which would see Benitez depart with a lucrative pay-off worth in the region of £4million.
Liverpool, ultimately, have decided it is time to move on and progress. The Dallas-style soap opera that has blighted the famous club's name over recent months had to stop and Benitez will be the cast member to depart.
That was inevitable after a disastrous season in which Liverpool finished seventh in the Barclays Premier League and Benitez blamed a dwindling transfer budget for his squad's inane performance. That did not sit well with owners Tom Hicks and George Gillett, who, despite declaring their intention to sell the club, knew action had to be taken swiftly for the Anfield outfit to move forward or risk implosion. With every penny counting, doing nothing was too big a risk to take.
Benitez has spent more than £220m on more than 70 players in his colourful six years at Anfield. Confidence in his ability to wheel and deal, particularly on the back of last season's £17million acquisition of Alberto Aquilani, was evidently not there.
When Juventus came knocking, Liverpool believed an easy exit was apparent for the Spaniard but he did not have enough faith in the Juventus project and harboured hopes that Liverpool's fortunes would change with new ownership. However, with annual losses of £55m, debts totalling £351m and the club out of the Champions League, Liverpool is not an easy or, more importantly quick, sell.
Benitez was always going to find it difficult after winning the Champions League famously in his first season as that dramatic Istanbul victory over AC Milan raised the roof on expectation.
When the Kop sang You'll Never Walk Alone to him they meant it and he reciprocated. He danced with them and drank with them establishing himself as a man of the people but, ultimately, the team's demise has even weakened that bond. While he enjoys the majority of support, some fans have brought his credentials into question this season.
Transfers, team selection and substitutions have all raised eyebrows - even among the stars of his team. The Americans will always take the brunt of the blame but now Benitez will be forced to walk away and into the arms of Inter Milan.
Following in the footsteps of his great adversary Jose Mourinho will not be easy but already the Inter fans are calling for the man 'who stole the Champions League away from Milan'. That one night in Istanbul could yet serve Benitez well.
Rafa's Highs & Lows:
Highs
- May 2005 - Leads club to a miraculous Champions League final triumph in his first season. One of the all-time comebacks.
- May 2006 - Another comeback, this time in the FA Cup final against West Ham.
- July 2007 - Signs Fernando Torres for a fee of around £21m from Atletico Madrid.
- March 2009 - Signs new five-year contract.
- May 2009 - Finishes second in the league.
Lows
- January 2005 - In his first FA Cup match, his side lose to Burnley.
- November 2007 - Very public fall-out with new owners.
- January 2009 - Faces public ridicule after his 'facts' press conference.
- July 2009 - Replaces Xabi Alonso with £17m midfielder Alberto Aquilani.
- December 2009 - Humiliated as his side are knocked out of the Champions League in the group stages.