Fulham manager Roy Hodgson will get a £2million jackpot from Fulham in the hope of keeping him away from Liverpool.
Owner Mohamed Fayed is prepared to double the manager's salary to make him stay at Craven Cottage.
Hodgson, 62, signed a £1m-a-year 12-month rolling contract in January but is Liverpool's top choice to replace sacked Rafa Benitez.
Fulham insist they have had no approach yet but are braced for a fight to hang on to their manager.
Al Fayed recently made £1.5billion from the sale of posh London store Harrods and has vowed to use it to plough more cash into the club.
Hodgson is also a candidate to eventually replace England boss Fabio Capello and could miss out if he joins Liverpool this summer and the Italian quits after the World Cup.
A Fulham insider explained: "Leaving Fulham to take over at England would be seen as the pinnacle of Roy's career.
"And everyone thinks that's what he would love to do.
"He could miss out on that if he gets tempted by Liverpool and then the England job comes up not long after.
"There's also the question of Liverpool being up for sale at the moment. Roy could go there under the current owners, new men come in and the job could end up being very short-term."
Hodgson's stock is at its height after he led Fulham to an unlikely Europa League final last season.
In barely two years, he saved the club from relegation then clinched seventh place in the Premier League and European football on a relatively meagre budget.