Leading bookmakers stopped taking bets on the Spaniard's future in the hours leading up to their UEFA Champions League clash with Real Madrid amid widespread speculation he was ready to quit Anfield.
But after watching his side secure a precious 1-0 lead in the first leg of their last 16 clash thanks to Yossi Benayoun's late goal, Benitez was keen to stress that discussions over his new deal have not broken down.
The former Valencia boss has already rejected the club's initial contract offers as he wants more control over transfer policy, but believes an agreement can be reached over the concerns that are delaying him putting pen to paper.
ShockThe Spaniard said: "My lawyers and advisors have been talking to the club's owners over the past few days about the contract and I believe that problems we have can be overcome.
"I was very surprised to hear rumours that I was going to resign.
"I can assure you that I have not been considering such a move, and it was a shock to hear such suggestions.
"It needs to be clear that I was not thinking of resigning. My aim is to keep working and winning and to tell the owners that on the pitch."
Benitez has been locked in talks with owners George Gillett and Tom Hicks over a new four-year deal for several weeks.
And he strenuously refuted claims he was considering his position, reiterating he is happy at the club.
Stability"I expect talks to continue between my lawyers, my advisors, myself and the owners," added Benitez.
"I am really pleased with my position at the club, I have not been thinking about resigning.
"My aim is to win every game that is possible for this club, and my advisors will continue to talk. We will see what happens then.
"We are still talking, so we will see what happens in the future.
"I was not thinking about resigning, obviously I cannot control other things that I could be fired, but I was just concentrating on the game.
"The club has made it clear this rumour was not true. That is important for everyone. Stability is the key if you want to be successful.
"And the players were able to do their talking on the pitch, not beforehand."