Liverpool's move to sign Crystal Palace defender Marc Guehi on transfer deadline day has fallen through.

A deal was agreed to sell Guehi to the Merseyside club for a fee of £35 million, plus a 10 per cent sell-on clause.

The 25-year-old was permitted to complete the formalities of his move and had started undergoing a medical in London on Monday, before signing what would have been a five-year contract with the Premier League champions.

But sources have now confirmed to BBC Sport that the deal is off.

Palace were refusing to sanction the transfer as they faced difficulties in sorting a replacement, with target Igor Julio opting for a move to West Ham.

They completed two signings on deadline day.

Toulouse centre-back Jaydee Canvot joined on a four-year deal while Christantus Uche arrived on a season-long loan from Getafe.

Palace wanted two defensive replacements before sanctioning Guehi's exit.

It was a busy deadline day for Liverpool, who also agreed a British record £125m deal with Newcastle for striker Alexander Isak.

Guehi captained Palace to a 3-0 win at Aston Villa on Sunday, scoring a spectacular second goal.

Speaking after the match, he did not discuss his future.

"All I know is when you score goals like that, it is always down to team performance," he said. "People will try to single out the goal, but that was a clear team performance tonight."

Guehi had been a key target for Liverpool this summer after Jarrell Quansah left Anfield for Bayer Leverkusen.

There have also been concerns about the solidity of Liverpool's defence, which conceded six goals in their first three games of the season.

They lost the Community Shield on penalties to Palace - who Guehi captained at Wembley - and gave up two-goal leads in the Premier League to Bournemouth and Newcastle before fighting back to win.

What next for Guehi?

Guehi will now return to Crystal Palace, where he has performed a key role in the start of the club's season, despite speculation about his future.

He has played 90 minutes in all six of Palace's games across three competitions, including the Community Shield win, and the Conference League as the Eagles returned to Europe.

They qualified for Europe by beating Manchester City in the FA Cup final - the club's first major trophy, lifted by Guehi - and are competing in this season's Conference League.

But his long-term future remains uncertain, as he is in the final year of his contract and has told Palace he does not want to extend it.

Guehi has broken into the England squad since joining Palace from Chelsea in 2021, and was key for the Three Lions in their run to the Euro 2024 final.

Analysis: Guehi returns to Palace - for how long?

Sami Mokbel

Senior football correspondent

The son of a church minister, Guehi will view Monday's astonishing collapse of his move to Liverpool simply as the path that was set for him.

Of course, the prospect of leaving next season on a free transfer, and the lucrative wealth that accompanies that scenario, will soften the blow.

Yet you can't help but feel for the way Guehi has been treated through no fault of his own.

He stayed respectful to Palace in the face of Liverpool's interest when others haven't shown their employers the same sort of courtesy this summer.

He was due to sign his contract at Liverpool's offices in the capital only for Palace to pull the rug from under him.

Igor Julio appeared to be close to joining Palace only for West Ham to move for him at the 11th hour. The Hammers' hijack effectively cost Guehi his move to Anfield.

Palace - particularly manager Oliver Glasner who didn't want to lose Guehi in the first-place - decided they could not go into the rest of the season one centre-back short.

You have to ponder how the decision will affect the club's future.

On the pitch, it will provide the team with a major boost. Guehi is recognised as one of English football's premier centre-backs.

Financially, however, you have to wonder how losing the £35m fee will impact the club.

If, as expected, Guehi leaves next summer on a free transfer it will be difficult for a club with limited finances such as Palace to sign a top quality replacement.

With that said, fans won't care. All they care about is that Guehi is staying. But for how long?