The Reds ended their interest in Monaco winger Thomas Lemar this week, leaving Arsenal with a free shot at the pricey attacker.
Jurgen Klopp thinks Lemar has his heart set on a switch to Barcelona in the summer and has ordered his Liverpool transfer chiefs to move onto other targets.
And the Mirror claim Bailey is the man leading the list of potential replacements for Philippe Coutinho.
Chelsea saw a bid of over £20million turned down by Bayer Leverkusen for Bailey last January.
The Blues though, have not been put off and are confident they can strike a deal for the hugely-talented 20-year-old in the summer.