Houllier’s assistant at Anfield, Phil Thompson, revealed in October that the club were close to agreeing terms with Ronaldo, but he left the remainder of the story open ended.
Houllier has now filled in the blanks, indicating the economic and political reasons were to blame for not getting the transfer over the line – as well as a sense of caution given that they had seen little of the burgeoning star.
“Phil is right in that we missed him but there are a lot of people who can say that too,” he told Monaco Matin.
“In 2002, the year I was sick, we decided to take Ronaldo and Ricardo Quaresma, two Sporting CP players. They had won the Toulon tournament with Portugal and were very good on the wings.
“We had been following Cristiano for a year, but it was dragging a bit because at the salary level it was more demanding than what we could do for Ronaldo.
“You have to know that there was a salary policy at Liverpool and Michael Owen had just won the Ballon d'Or. You couldn’t give a 17-year-old a higher salary than him.
“I have had a lot of contact with Cristiano but Manchester United played a friendly against Lisbon. Sporting won 3-1, Cristiano scored two goals [sic: Ronaldo did not score in the fixture] and all the United players said he had to be bought.
“His price went from £4 million to £13m and we could not match it.
“Maybe also our recruiter should have said yes right away but he wanted to be sure, to not make a mistake.”
Despite the near miss, Houllier has never held it against the five-time Ballon d’Or winner.
"It's funny because I've always kept a special relationship with Cristiano,” he said. “I was at his first Ballon d'Or ceremony with Alex Ferguson, he was really happy.
“We kept a kind of close relationship when I was coach of Liverpool and he played against us.
“He is a model of professionalism, an exceptionally hard worker. We can say whatever we want about him, he is a talented leader but also a leader of effort. Forty goals per season, chapeau!
“English football did him good, plus he had David Beckham as his tutor.”