According to The Sun, Reds manager Rafael Benitez has agreed to pay £25million for the 23-year-old Spain international.
However the deal could be held up because Torres is entitled to 10 per cent of any fee and Atletico Madrid insist Liverpool should pay it.
The Premier League side are adamant this cash, all £2.5million of it, should come out of the overall transfer pot.
Atletico president Enrique Cerezo said: "Every player has a price and if they pay the transfer clause there is nothing we can do to stop Torres leaving.
"But at the moment what is certain is that there is nothing going on with Torres and any other club."
Benitez's own agent Garcia Quilon is trying to broker a deal and Liverpool are confident they will get their man.
Torres has long been linked with a move to England with his impressive 82 goals in 212 games for Atletico really raising awareness of his raw talents.
Meanwhile Liverpool have been expected to throw Djibril Cisse into the deal as part of a player-plus-cash arrangement while Luis Garcia could also be included.