Kenny Dalglish sacked as Liverpool manager

After 18 months back at the helm, Dalglish has paid the price for a poor league performance, during which time he lost the faith of his board.

A statement on the club's official website read: "Fenway Sports Group (FSG) and Liverpool Football Club announce that Kenny Dalglish is to leave his post today as Manager after having his contract terminated.

"After a careful and deliberative review of the season, the Club came to the decision that a change was appropriate. It is not a decision that was reached lightly or hastily.

"The search for a new Manager will begin immediately."

Fenway Sports Group are in the midst of a major restructure at Anfield, and their review of the club includes the manager's chair.

During a summit in Boston they told Dalglish of their frustration with his poor use of club resources in the transfer market. The £110 million spent on seven players did not bring the improvement they anticipated, despite a strong showing in the domestic cups.

Principal owner John Henry and chairman Tom Werner became disillusioned with the inconsistency of performances and have become intolerant of suggestions bad luck was the main cause for Liverpool's failure to challenge the top four.

For Dalglish, an emotional return has come to a disappointing end. He hoped winning the Carling Cup would be the catalyst for another golden period, repeating his first glorious spell in charge.

He knew he was in a vulnerable position when Director of Football Damien Comolli was sacked for buying too many under-performing players. The implication was Dalglish, too, was being blamed for targeting mediocre signings.

Although Werner said at the time Dalglish had his "full support", there were no promises he'd remain in charge if Liverpool did not improve their league position.

Home defeats to Wigan and Fulham made the situation even worse and there was a feeling only winning the FA Cup would save the manager.

Losing to Chelsea at Wembley raised concerns Dalglish's fate was sealed, and the refusal of the board to publicly comment on the manager's future was a sign his position was being assessed.

Off the field there were also problems, with the mishandling of the Luis Suarez racism case at one stage prompting Dalglish to issue an apology for his tone while being interviewed on television. That revealed the first cracks in the relationship between the manager and his bosses.

Dalglish decided to travel to Boston to determine for himself what the club's plans were. He soon realised they did not involve him remaining in charge.

FSG are now expected to pursue a younger coach who will match the criteria they set out on first buying the club. They were convinced to appoint Dalglish after his success in a caretaker role and because of his legendary status and popularity among fans.

Now, the owners have numerous vacancies to fill at Anfield, the most important of all being that of the manager.

It promises to be a defining summer in Liverpool's modern history as the club seeks to restore its dwindling status in the upper echelons of English and European football.

Principal owner John Henry was fulsome in his praise for the outgoing manager.

"Kenny will always be more than a championship winning manager, more than a championship winning star player," he said. "He is in many ways the heart and soul of the club.

"He personifies everything that is good about Liverpool Football Club. He has always put the club and its supporters first. Kenny will always be a part of the family at Anfield.

"Our job now is to identify and recruit the right person to take this club forward and build on the strong foundations put in place during the last 18 months."

Liverpool chairman Tom Werner has admitted it was a tough decision, but ultimately one that needed to be made.

"Kenny came into the club as manager at our request at a time when Liverpool really needed him. He didn't ask to be manager; he was asked to assume the role.

"He did so because he knew the club needed him. He did more than anyone else to stabilize Liverpool over the past year-and-a-half and to get us once again looking forward. We owe him a great debt of gratitude.

"However, results in the Premier League have been disappointing and we believe to build on the progress that has already been made, we need to make a change.

"We are committed to delivering success for our supporters and our ambition remains resolute to return this great club to the elite of England and Europe, where it belongs."