Liverpool manager Rafael Benitez has defended his decision to pay over the odds for right-back Glen Johnson, even though he admitted the deal has cost him more than he had hoped.

The Portsmouth defender on Monday agreed to move to Anfield and he is expected to formally sign a contract in the next couple of days.

Reports suggest the transfer is costing £17million, although much of that will be written off because of money still owed by Pompey after Peter Crouch's move to Fratton Park last summer.

Chelsea tried to take their former player back to Stamford Bridge but Benitez was always confident the England international would choose Anfield - even if it was at a premium.

"Sometimes you have to spend a little bit more," said the Liverpool boss.

"You can't compete in the top four of the Premier League unless you spend some money.

"We were looking for a player of quality and also somebody who is British because of the new Champions League rules.

"Glen Johnson fits both categories."

The fact Benitez has been able to make his first summer signing will help fend off claims the club are in financial trouble.

Kop Holdings, the club's parent company, posted a £42.6million loss in the year to August 2008 but concerns over the £350million loan taken out by American owners Tom Hicks and George Gillett to buy Liverpool appear to have lessened after reports today suggested a refinancing package had been agreed.

Benitez is confident he will make other signings, although he may spend more of his time trying to hang on to the likes of Xabi Alonso, Alvaro Arbeloa and Javier Mascherano who have all been linked with moves to Real Madrid and Barcelona.

"We have a plan. We can sign one more player if necessary, but that's without any players leaving," he told the Liverpool Echo.

"Alvaro Arbeloa has had a very good season but he has one year left on his contract.

"If he signs that will be good because we will have more competition, but if we get a good offer we will have to consider it."

Benitez is also hoping Sebastien Leto and Andriy Voronin - who both were loaned out last season - will bring in more funds along with left-back Andrea Dossena, who could return to Italy after just one season at Anfield.

Leto is on the verge of a move to Panathinaikos after he became impatient waiting for Olympiacos, where he was on loan last season, to make their move.

"I think that the possibilities to play at Panathinaikos next season right now are more than 90%," said the Argentinian winger.

"I have been waiting for something from Olympiacos all these weeks but they didn't make a move to buy me so far."