Exasperated and mystified by the man he made king

Analysis

There was a glint in Rick Parry's eye when he approached Steven Gerrard and Jamie Carragher, after Gerard Houllier had left in the summer of 2004. "What are the players' feelings on another foreign manager?" he asked them. "What do you think of Rafa Benitez at Valencia?"

Their positive response contributed to Liverpool's decision to hire Benitez, ahead of Alan Curbishley and Gordon Strachan, who were interviewed, but as Parry's departure from Anfield was announced yesterday the chief executive could reflect on how that decision, taken with the one that allowed a penniless Tom Hicks and George Gillett Jr to buy the club – Parry receiving a £500,000 bonus in the process – were the foundations of his downfall.

He has ridden out a bumpy journey as his relationship with Hicks has deteriorated over the past 18 months, but he informed the Americans of his decision to quit late last week, as it became clear in drafts of Benitez's new contract that they were transferring substantial control from him to the Spaniard. Parry's decision is understood primarily to have been based on a realisation that Hicks is not going to find a buyer for his 50 per cent share of the club and that he would be stuck in a working relationship which has become dislocated, rather than start afresh.

Parry informed Hicks and Gillett individually of his decision by telephone and Gillett is believed to have indicated that he would have liked him to stay – though his relationship with Parry, an ally at the factionalised club Liverpool have become, is not as strong these days as Hicks's relationship with Benitez.

Hicks and Gillett have insisted, throughout three months of contract talks with Benitez, that "checks and balances" to the manager's power – through a corporate structure including an active chief executive – must remain in place and that Benitez's demand to spend £20m as he sees fit is unrealistic. It remains to be seen how much ground the owners will cede, but Parry is understood to have despaired last Sunday after Benitez had again provided a sense of frustration with the club, despite new contractual concessions affording him greater control.

The most fateful event in Parry's demise was the notorious meeting with Jurgen Klinsmann in November 2007, set up by Gillett with Parry present, amid doubts about Benitez's future. When Hicks sought to appease Liverpool fans five months later, he claimed that Parry had spent "three or four hours" alone with Klinsmann. Hicks found Parry a useful target. He called him a "disaster" and demanded he quit. Parry justifiably called this "offensive", though he has felt, ever since playing a major role in ensuring that most of the refinanced loans taken out for the purchase of the club were set against the Americans' holding company, rather than the club, in December 2007, that he faced the sack.

Hicks's ostracisation of Parry has gradually increased, with the establishment of a shadow board, led by commercial director Ian Ayre and finance director Phil Nash, who work in Liverpool city centre. Parry had no involvement in discussions with a prospective Kuwaiti buyer for Liverpool, last July, nor in discussions with the Al-Kharafis, while discussions with Tottenham Hotspur over the sale of Robbie Keane back to the club appeared to have been conducted without his knowledge.

Parry has been exasperated and mystified by Benitez's claims that Keane was forced upon him, since there had been consensus on the need for a striker after Peter Crouch's departure last summer. Benitez might seem to have won his battle for control, but there is no sign of the club's civil war reaching an end. Though Ayre and Nash are contenders for Parry's role, both are Hicks's men and Gillett's relationship with Ayre is particularly difficult.

The preferred route is to replace from outside the club, but recruiting a good candidate will be difficult, given Benitez's failure to work either with Parry, or with Manuel Llorente at Valencia before that. If the owners cede total power to the Spaniard to settle his contract, then a job which should be one of football's most coveted will truly be a poisoned chalice.

Parry and pots: Silverware record

*Rick Parry has presided over 11 trophy wins during his time at Liverpool:

*Champions League 2005, Runners-up 2007.

*Uefa Cup 2001.

*Super Cup 2001, 2005.

*Intercontinental Cup 2005.

*FA Cup 2001, 2006.

*League Cup 2001, 2003, Finalists 2005.

*Community Shield 2001, 2006, runners-up 2002.

*Best Premier League finish Second 2001-02.