Liverpool boss Rafael Benitez has revealed he was fully aware of the club's financial problems before he signed his new five-year contract in March.
And a defiant Benitez insists he is happy with his transfer budget and still aims to bring in "one or two" top signings ahead of next season.
The Liverpool boss was speaking in the wake of the release of the club's worrying financial figures last week, underlining the need for prudence in the transfer market. The damaging financial reality hit home when accounts, for the season 2007-08, showed Kop Holdings lost £42.6million on the year.
Kop Holdings is the company set up by under-fire American owners Tom Hicks and George Gillett to run Liverpool. Although the football club made a £10million profit, that money was swallowed up in paying the interest on the loans taken out by the Americans to buy the club. Benitez reveals he was working last season to tie key players to new contracts, fully aware of the financial straits at the club that would be exposed this summer.
He said: "We spent some money to solve that situation, to guarantee the extension of those contracts. Now we need to improve a little bit because we are in a very good position.
Yes, we knew it would be difficult, especially as there is a (financial) crisis all around the world.
"But when I decided to sign a five-year extension to my contract, I knew in my own mind that Liverpool is more than just a club, it is the heart of the city. It is our life. It means so much to a lot of people. We had to sign, we have to fight, we have to do it because we wanted to do it. The people in Liverpool are always fighters, they have done that all their lives. We know that. We also knew that the (financial) situation was not fantastic. But we still have a lot of confidence in our squad and we want to fight (for the title) again next season."