O'Neill insists Villa cannot continue to be at the "behest" of the Merseysiders, who have failed to offer the £18million he is seeking for the England midfielder.

The former Celtic boss is aware he has to make his own plans for the new campaign and needs to know whether he will have the services of Barry.

Already O'Neill is considering using the 27-year-old in Saturday's home Intertoto Cup clash with Odense BK.

But that would not make Barry ineligible to play Champions League football if he eventually moved to Anfield.

O'Neill, who has rejected four bids for Barry from Reds counterpart Rafael Benitez, said: "It's been unfortunate. We don't know where we stand at this minute.

"Liverpool have not officially come back to us in any form of writing. It is a really awkward position here at this minute.

"At some stage or other there will have to be a timescale on it because we cannot just keep going on like this.

"We have got our own plans to make - and we shouldn't be at the behest of Liverpool Football Club.

"We have to pick up the pieces and I could go on for forever and a day talking about it. It doesn't really matter. We have to see what develops.

"As I say, we have not heard back from them in an official capacity."

O'Neill is ready to consider Barry on Saturday even though he was the target of abuse from Villa fans during Tuesday's friendly at Walsall.

He said: "If Gareth is in the right frame of mind then we will explore everything. He will be in contention for Saturday.

"I have never not been impressed with him in two years as to his attitude on the football pitch.

"In fairness the Intertoto gives us that chance to get into the UEFA Cup, which we set out to get into by one way or another, and Gareth was a major part of that last year."

O'Neill maintains he would still like Barry to remain at Villa but is frustrated at the lack of progress one way or the other.

He said: "Deep down we would all love him to stay at the football club. We haven't heard back from Liverpool for some time and we're not exactly sure where we all stand.

"When people say people are in limbo, I don't think that applies to anybody more than ourselves. We don't know whether to move forward or not with it.

"It's a long-running saga and I wouldn't mind it ending one way or another.

"My preference - and hopefully I'm speaking for a lot of Villa fans, if not all of them - is that we would like Gareth to stay at the football club.

"That would be great because it will be hard to replace him.

"But we're not sure where Liverpool stand now. It was never mentioned before about them needing to sell some players before they bought - that was never in the system at all. But seemingly it must be part of it.

"The point is that this has been long running and we're looking to see it end one way or another."

O'Neill, who is hoping to complete the signing of Blackburn goalkeeper Brad Friedel, is aware of the need to bring in new blood with the start of the Premier League campaign only three weeks away.

He said: "We've lost experienced players like Olof Mellberg and we have to replace them.

"While I am very, very pleased with some of the young players coming through the ranks at Villa, for us to be competing again we need to be competing immediately, as soon as the Premiership season kicks off.

"From day one, that is our aim."

O'Neill added: "We're in the throes of trying to improve our team and we need to. But I'd prefer to stay rather general on these points and not comment on all the reports and speculation.

"There are things that we want to do and we've got a couple of weeks to try and improve the team. Actually we've got to the end of August but ideally it would be great if the season was kicking-off and we had a number of players in position.

"We are working as hard as we possibly can do behind the scenes to improve our squad, which we need to, and that hard work will continue."