LIVERPOOL boss Rafael Benitez has been placed on red alert after Newcastle centre-half Steven Taylor turned down the offer of a new five-year contract at St James' Park.

Taylor, who is the most successful player to have emerged from Newcastle's Academy in the best part of a decade, was in Montenegro last night captaining England Under-21s.

But, in his absence, his father and representative, Alf, confirmed the defender had rejected an offer that was described as "disappointing".

That news has been greeted with interest at Anfield, where Benitez has long coveted arguably the most promising young centre-half in the English game.

And while the Liverpool manager opted not to make a formal offer for Taylor's services during the summer transfer window, sources on Merseyside suggest he will attempt to sign the North-Easterner if the current impasse is not resolved by January 1.

With Sami Hyypia approaching retirement, Benitez is understood to regard Taylor as an ideal back-up to his preferred defensive partnership of Jamie Carragher and Daniel Agger.

Taylor's current Magpies contract runs to 2009 but, after making 44 senior starts last season, the 21-year-old is looking to secure an improved deal.

James Milner and Charles N'Zogbia have both re-negotiated pre-existing deals recently, and Taylor had been hoping to follow suit.

But while he insists he has no intention of leaving Newcastle, he is clearly frustrated at the club's unwillingness to meet his demands.

"I only hope they are not trying to force Steven out," said his father, Alf.

"He loves Newcastle United and it is the only club he wants to play for, but he is most disappointed at what they are offering."

Taylor is currently one of the lowest-paid first-team players on Newcastle's books.

While summer signing Abdoulaye Faye is understood to be earning around £30,000-a-week after completing a summer move from Bolton, Taylor is believed to be commanding less than a third of that figure despite earning a call-up to Steve McClaren's senior England squad last month.

"Fans seeing the likes of Albert Luque and Jean-Alain Boumsong coming into the club with massive wages must think Steven is on big bucks, but that is not the case," added Taylor senior.

"He is not playing for Newcastle for the money, but because he loves football and the club.

"But having said that, it is a short career and the financial aspect is still important.

"Fortunately, while he is disappointed, Steven has never - nor ever will - let it affect his performance on the field.

"He is a local lad who only wants to play for his local team.

"But perhaps that is why his contract offer is not in the same category as those players who are coming in from all over the place.

"Yet I do not see this being a problem at Liverpool with Steven Gerrard and Jamie Carragher."

Taylor was not the only Newcastle player on Under-21 duty last night, as Charles N'Zogbia was making his bow for France's junior side against Wales in Grenoble.

The versatile left-footer has been rewarded with a lucrative deal after his impressive start to the new season and, while France are hardly short of talent on the international stage, he is already eyeing a promotion to Raymond Domenech's senior squad.