LONDON: Liverpool legend Kenny Dalglish was sacked as manager of the club on Wednesday in a dramatic move by the club’s owners following a disappointing Premier League campaign.

The 61-year-old Scot, who had returned for a second stint as manager at Anfield in January last year, paid the price for a dismal season which saw Liverpool finish 37 points behind champions Manchester City.

The Merseyside club’s American owners the Fenway Sports Group had given Dalglish more than 159 million dollars to spend in the transfer market since he took over from the sacked Roy Hodgson in 2011.

But expensive signings such as Andy Carroll, Stewart Downing, Jordan Henderson and Charlie Adam have largely flopped, with Liverpool’s eighth place finish their worst season-ending position for nearly two decades.

“Fenway Sports Group and Liverpool Football Club announce that Kenny Dalglish is to leave his post today as manager after having his contract terminated,” a joint statement said.

“After a careful and deliberative review of the season the club came to the decision that a change was appropriate.

“It is not a decision that was reached lightly or hastily.

“The search for a new manager will begin immediately.”

Dalglish, a revered figure amongst Liverpool’s supporters following an association with the club that straddles five decades as player, manager and ambassador, had also suffered a critical mauling for his handling of the Luis Suarez racism affair earlier this season.

Dalglish’s refusal to countenance any criticism of the Uruguayan striker, who had been found guilty by an independent FA tribunal of insulting Manchester United defender Patrice Evra, was widely condemned.

Dalglish had flown to the United States on Sunday to present his end-of-season review to principal owner John Henry and chairman Tom Werner, who had only last month given the Liverpool legend his backing.

Indeed, Dalglish’s position seemed to have been strengthened when French director of football Damien Comolli abruptly left the club on April 12, having apparently taken the blame for Liverpool’s poor results.

Although Dalglish ended Liverpool’s six-year trophy drought this season with victory in the League Cup, the club were comfortably beaten by Chelsea in the FA Cup final earlier this month.

Liverpool lifted the gloom with a 4-1 win over Chelsea in their final home game of the season, but a 14th loss against Swansea in their last game of the campaign on Sunday was the last straw.

The defeat against the newly promoted Swans, whose squad cost a fraction of Liverpool’s to assemble, left Liverpool in eighth – their worst finish for 18 years, with their lowest points tally since 1953/54.

British media reports have already linked several younger up-and-coming managers to the vacancy at Anfield, with Wigan’s Roberto Martinez, Swansea’s Brendan Rodgers and Norwich’s Paul Lambert all mentioned as possible candidates to succeed Dalglish.