Kenny Dalglish was dramatically sacked after Liverpool’s owners held him responsible for the club’s dismal Barclays Premier League campaign.
Just 34 days after Liverpool chairman Tom Werner had said the Scot retained the ‘full support’ of Fenway Sports Group, Dalglish became the highest-profile victim of their ruthless cull.
Former Chelsea boss Andre Villas-Boas has been linked but Wigan manager Roberto Martinez, who is expected to hold talks with Aston Villa over their vacant managerial post, is currently the bookmakers’ favourite to replace Dalglish.
Other contenders could include Swansea’s Brendan Rodgers, Newcastle boss Alan Pardew, Marseille’s Didier Deschamps and Borussia Dortmund’s Jurgen Klopp.
Werner said: ‘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 stabilise Liverpool over the past year-and-a-half. 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.'
Anfield icon Dalglish was informed on Wednesday lunchtime of the decision by principal owner John W Henry that his contract, which had two years left to run, was being terminated. It was a tacit acceptance that he lacked the ability to deliver Champions League football.
Dalglish’s future had been the subject of intense scrutiny ever since he returned from a whistle-stop trip to Boston on Monday without any word from FSG about how their meeting had gone.
Though Liverpool won the Carling Cup and reached the FA Cup final, they finished eighth in the Premier League, one place behind neighbours Everton, with 52 points.
Dalglish, who left the country on Wednesday afternoon for a family holiday, follows director of football Damien Comolli, director of communications Ian Cotton and head of sports science Peter Brukner in being axed by FSG in the last five weeks. His assistant Steve Clarke also left with him.
Whoever comes in will need to bring success without spending swathes of cash, and part of the reason Dalglish has gone is because FSG were not convinced he would utilise their funds wisely this summer.
Henry said: 'Kenny will always be more than a championship-winning manager, more than a championship-winning star player.
'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.’
Emotions were running high on Merseyside, with many supporters feeling that Dalglish had been treated poorly by FSG.
As well as retaining the backing of fans, there was no sign that any members of his squad had lost faith in his project.
Dalglish led Liverpool to their first trophy for six years at Wembley in February and insisted that Carling Cup success over Cardiff City meant the world to him.
He said in a statement: 'It has been an honour and a privilege to have had the chance to come back to Liverpool Football Club as manager.
'I greatly appreciate the work that Steve, Kevin, the players and all of the staff put in during my time and feel proud that we delivered the club's first trophy in six years winning the Carling Cup and came close to a second trophy in the FA Cup final.
'Of course I am disappointed with results in the league, but I would not have swapped the Carling Cup win for anything as I know how much it meant to our fans and the club to be back winning trophies.
'Whilst I am obviously disappointed to be leaving the football club, I can say that the matter has been handled by the owners and all concerned in an honourable, respectful and dignified way and reflects on the quality of the people involved and their continued desire to move the football club forward in the same way as when they arrived here.
'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.'
A 14th defeat of the season at Swansea on the final day of the season condemned the club to an eighth-place finish, their worst for 18 years and their lowest points tally (52) since 1953/54.
'I would like to thank all of the staff at the club for their effort and loyalty. I said when first approached about coming back as manager that I would always be of help if I can at any time and that offer remains the same.
'Finally, I want to put on record my heartfelt gratitude to Liverpool's fans, who have always given me and the club their unwavering support. Without them neither the club nor I would have achieved anything.'
Former managing director Christian Purslow told BBC Radio 5 Live: ‘I’m extremely surprised and disappointed. They invested a lot of money in his team and I’m not sure they’ve given him anywhere near enough time to make the investment work. It seems bizarre to me.’
Club legend John Barnes said: ‘Liverpool have been a good cup side over the last few years but doing well in the league is what it’s all about.’
By DOMINIC KING
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