JAAP Stam refused to be drawn on speculation linking Reading FC with Liverpool defender Tiago Ilori before confirming he is hoping to strengthen his squad in January.

It has been reported that Royals are on the verge of breaking their own transfer record by landing the 23-year-old centre-back from Liverpool for around £3.5m.

But Stam was unwilling to discuss specific transfers when the Chronicle asked him to comment on the speculation at today'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 is said to be set for a medical at Reading tomorrow before discussing personal terms.

Reading have also been linked with Brentford's Scott Hogan, who was the subject of a reported £10m bid from West Ham earlier today.

And Stam confirmed stories suggesting Royals had bid £9m for the Bees striker were wide of the mark.

“I have seen a couple of names in the papers and we are always looking for players with the experience to make a difference,” he explained.

“Ideally we are looking for young players who maybe don't cost that much. But the quality of our technical staff we can improve them and make them better players.

“We are always looking at our options and to strengthen our squad in January.

“Like I say, we need to look at the budget and speak to the owners about what we can do.

“What we can't do is, contrary to what has been written, offer £9m or £10m for a player.

“We do not have that kind of money, so we need to be inventive with how we can solve the problem.”

Stam was keen to point out Reading are not in the same league as some of the Championship's big-spending clubs when it comes to budgets and transfer fees.

Newcastle have been linked with a £12m offer for Hogan, though Brentford are believed to be holding out for £15m.

“That's out of our league, we can't do that,” said 44-year-old Stam. “Clubs like Newcastle, Ascot Villa and Norwich still get all this money from Premier League television rights which means they can put in offers like this.

“That's not for us, we cannot do that.

“Sometimes you could argue it is not an even league. Some clubs have budgets of £2m while others have budgets of £70m.

“So there can be no surprise when some clubs do better that others.

“But we need to work within our own budget and I believe we are doing it quite well, so I am happy with how we are performing.”

Reading remain in the midst of another potential takeover – this time by Chinese siblings Dai Yongge and Dai Xiu Li.

In the meantime Stam says he has held conversations with current majority shareholder Sumrith 'Tiger' Thanakarnjanasuth about the amount of transfer funds available.

“I've spoken to Tiger, he wants to do well and he is willing to invest in certain players and bring them in to strengthen the squad.

“We've still got quite a few days left of the window to think about that and make certain choices.

“Hopefully we can do something.”