Lyon playmaker Fekir underwent his Reds medical on Friday, with personal terms already agreed with the player.
However, a recurring knee injury resulted in Liverpool pulling the plug on the deal.
Lyon claim it was them who ended the transfer, however, reports suggest the contrary.
And according to ESPN, Jurgen Klopp is ready to sign Stoke star Shaqiri as an alternative to Fekir.
They say Reds officials met with Shaqiri’s brother and agent last Friday to discuss a move to Anfield.
Shaqiri, 26, is available for around £12m this summer due to a relegation clause in the winger’s contract.
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Liverpool are closing in on Xherdan Shaqiri after missing out on Nabil Fekir
ESPN add that Shaqiri’s representatives are also in talks with numerous other clubs while the attacker is in Russia preparing for the World Cup.
Liverpool boss Klopp is keen to splash the cash this summer to mount a Premier League title charge next season.
The Reds have already landed Monaco midfielder Fabinho and RB Leipzig’s Naby Keita.
Klopp also wants to bolster his attacking ranks to ease the pressure on Mohamed Salah, Sadio Mane and Roberto Firmino at Anfield.
It remains unclear whether Liverpool will re-enter negotiations for Lyon's Fekir after the World Cup.
The Reds were willing to pay around £53m for the France international, 24, this summer.
Liverpool are closing in on Xherdan Shaqiri after missing out on Nabil Fekir