Pepe Reina transfer latest: Napoli boss admits defeat for Liverpool goalkeeper, leaving the door open for Arsenal to make a move

Benitez admitted his Serie A side couldn't afford Reina's wages

Rafa Benitez has admitted defeat in trying to keep Liverpool keeper Napoli at the club (Getty Images)

Pepe Reina will return to Liverpool after Napoli boss Rafael Benitez admitted defeat in his attempt to try and make last season’s loan move permanent.

Benitez admitted that the Italian club can’t afford the Spanish goalkeeper’s wages, leaving a possible move to Arsenal open.

"Yes. Pepe has two years left on his contract at Liverpool,” Benitez told talkSPORT.

"He has to go back and he'll stay there. We can't afford Pepe's wages.

"The Premier League is a very big league and, in Serie A, we don't pay big wages like in England. He will have to fight for his position at Liverpool."

The Spaniard made 30 league appearances last season to help Benitez's men finish third in Serie A and qualify for the Champions League.

Reds manager Brendan Rodgers indicated earlier this year that he does not see a future for Reina on Merseyside.

Simon Mignolet has a firm grasp on the No 1 shirt under Rodgers, having enjoyed an excellent debut season on Merseyside as Liverpool launched a challenge for the Premier League title.

According to reports, Reina is a target for Arsenal boss Arsene Wenger who is seeking an upgrade on Wojciech Szczesny.

Reina is currently in Brazil with the Spain squad - they have their opening World Cup game against the Netherlands tonight.