The young striker is out of contract in the summer.
The 19-year-old is out of contract in the summer, and the Mirror reports that talks with the Merseyside club have stalled over a new deal.
Sinclair appears to have several options to choose from if he runs his contract down, as the Mirror reports that Premier League pair Bournemouth and Watford have made enquiries regarding a move, while Espanyol and Groningen are also monitoring his situation.
The Mirror adds that the Hornets were keen on doing a deal for the prospect this month. However, with Sinclair being available as a free agent in the summer - although they would have to pay a fee that will have been set by a tribunal (via Mirror) - they must now decide whether it is worth spending £3m on a player who will be available for a fraction of the price in a few months.
As well as due to Sinclair's contract situation, the asking price seems steep considering the forward's lack of experience in the Premier League. He has made just two substitute appearances in the top flight, so has yet to justify why a side should consider spending £3m to sign him early.