The club have confirmed that Parry will go at the end of the season, the decision being announced in the same week that Benitez has been locked in complex talks over his new four-year contract.

It is no secret that Benitez does not like the influence Parry has over transfer negotiations and contracts.

And he is still fuming that Parry helped guide the American owners Tom Hicks and George Gillett away from last summer's £18million move for Aston Villa's Gareth Barry.

The Americans decided the fee was too high after taking advice from club insiders and Benitez ended up with £20million striker Robbie Keane.

Keane has since been sold back to Spurs after failing to convince during his time on Merseyside.

The end of Parry's 12-year spell as the club's chief executive - having moved from a similar post at the Premier League - is therefore not a surprise.

Hicks and Gillett have been quoted today on the club's official website, liverpoolfc.tv, thanking Parry for his services.

But behind the scenes there has been months of acrimony. Benitez and Hicks are on one side of the battle line, with Gillett and Parry on the other.

Hicks publicly stated that he wanted Parry axed last season, but Gillett's equal power on the board blocked that move.

But it is accepted that it is Gillett who wants to sell his stake in the club quickly, and he could be the first owner to leave.

That would have left Parry with no ally. The writing was on the wall earlier in the season when he was kept out of the loop in discussions with Arab investors.

Phil Nash, finance director, and Ian Ayre, commercial director, were involved and both are Hicks appointments. Ayre would be considered a candidate for the post soon to be vacated by Parry.

Today's announcement comes at a time when Benitez is playing hard-ball over his new deal.

The man who engineered the magnificent win over Real Madrid in the Bernabeu on Wednesday found himself having to deny reports he was considering quitting the club in the aftermath of that Champions League triumph.

He confirmed that contract talks were on-going saying: "My advisors and lawyer are still in talks, there is plenty of time and the situation can be resolved."

Benitez wants control over the transfer budget, player contract negotiations and transfer fee bargaining. He also wants control over the club's academy.

It is believed that Parry would have opposed such moves but Benitez feels he is in a strong position and with Hicks clearly the more hands-on of the two owners, the Spaniard seems to be getting his way.