TIAGO Ilori is on the brink of becoming Jaap Stam's first January signing at Reading FC.

Royals are believed to have agreed a club-record fee of around £3.5 million with Liverpool for the 23-year-old defender in the last 24 hours.

A chunk of that transfer fee is thought to be made up of add-ons based on appearances and promotion to the Premier League, with Stam's side currently third in the Championship table.

Merseyside media are now reporting that Ilori is set to travel to Reading today for a medical and to discuss personal terms before sealing his move, possibly before the weekend.

Stam was reluctant to discuss specific transfers when the Chronicle asked him to comment on the speculation at yesterday's press conference ahead of the FA Cup third-round clash against Manchester United at Old Trafford this Saturday (12.30pm ko, live BT Sport).

The Dutchman said: “I can't say anything. You need to speak to Brian [Tevreden, director of football] about that.

“It doesn't mean some of our players need to go out because I like to have a big squad and I like to have choices.

“It's not always nice for certain players, we know that. If you are part of the squad you have to perform and do well.”

Ilori has made only three first team appearances for the Reds following a £4m move from Sporting CP in 2013 and he has already been farmed out on loan three times to Granada, Bordeaux and Aston Villa.

The London-born Portugal youth international failed to secure a move last summer and has spent this season with Liverpool Under 23s.

Royals have a number of options at centre-back with Jake Cooper and Danzell Gravenberch back-up to the first-choice pairing of Paul McShane and Liam Moore.

Joey van den Berg and George Evans can also play in that position, but Stam may be looking for even more specialist cover given his liking of a three-man central defence.

Meanwhile, Peterborough United’s Chris Forrester has also emerged as a chief target in the January transfer window.

The 24-year-old midfielder has been ever-present for Posh this season and has chipped in with three goals including a late winner at Northampton Town.

Royals have also been linked with Brentford striker, Scott Hogan, though rumours of a club-record £9m bid are unfounded.

Out-of-favour Crystal Palace midfielder, Jordon Mutch, and Aldershot Town teenager, Idris Kanu, are also thought to be on Stam’s radar.

Rumours also surfaced this week suggesting Stam is ready to raid his former club Ajax for midfield outcast, Thulani Serero.