Jamie Carragher, Fernando Torres and LFC captain Steven Gerrard were touted as 12/1 "favourites" to fall prey to thieves, the Liverpool Echo reported, with longer odds of 14/1 being offered on players including Dirk Kuyt, Andriy Voronin, Ryan Babel, Yossie Benayoun and Albert Riera.
After furious protests from fans and Liverpool FC, Paddy Power initially defended the bets as "tongue-in-cheek fun", but the online bookmaker has now agreed to suspend betting.
On Wednesday a Liverpool spokesperson described the bookmaker's stunt as "completely tasteless and disgraceful."
"The club had absolutely no prior knowledge of it, and as soon as it was brought to our attention we made contact with Paddy Power and insisted the market was closed and removed from their website," they said.
"By coincidence, our corporate agreement with Paddy Power comes to an end tomorrow," the spokesperson added.
A Paddy Power spokesperson said the firm had not meant to cause offence.
"Paddy Power has a reputation for tongue-in-cheek betting and for sticking our neck out, but there was no offence intended," he explained.
More than a dozen Merseyside players have fallen victims to gangs who prey on their absences from home while playing matches.
The most recent incident of a player's home being raided came in May when burglars targeted the home of Everton midfielder, Steven Pienaar, while he was playing at Goodison Park.
Steven Gerrard, one of the players named as a "favourite" to be burgled, has already been targeted by thieves.
In Dec 2007, his wife Alex Curran was confronted by four masked men as he played in a Champions League game at Marseilles