The north London club were in talks to sign the winger from FC Porto in the ongoing transfer window and were making progress in negotiations.
But Liverpool hijacked their pursuit of Diaz and tabled a bid worth €60m in the early hours of Friday morning to press ahead in the race to sign the winger.
Tottenham were reportedly prepared to match Liverpool’s financial offer for Porto and Diaz but the player made it clear that he wanted to join the Reds.
And it has been claimed that Tottenham have been left red-faced at getting beaten to the post by Liverpool.
The north London club were working on signing Diaz for several months and he was one of Antonio Conte’s priority targets.
They felt that they had the ducks in a row to secure a deal to sign the 25-year-old before Monday’s transfer deadline.
But Liverpool are the club who have sent a delegation to South America to conduct a medical for Diaz.
Tottenham have missed out on Adama Traore and Diaz in the last two days but are still hoping to spend money before Monday’s transfer deadline.
