O'Neil says:
Gareth Barry still has two years of his contract left to run and, from my two years' experience of working with him, he's not one who'd be wanting to break contracts lightly," he told the club's official website.
"Liverpool haven't made a straight cash offer. They've made an offer involving a mish-mash of nameless player exchanges."
O'Neill has also accused the Merseyside club of attempting to unsettle his captain after making their approach public knowledge.
"I'm particularly disappointed to hear that business is being conducted in public and I just want to be clear on this: We're trying to build a side here and we're not a feeder club," he continued.
"We want to be trying to challenge. At some stage we want to get to the position that this football club once held. That will demand an awful lot of effort. It will take a supreme effort and it will take very, very good players.
"I don't want to be in a position of letting really good players go. Gareth Barry is a really good player who still has two years left on his contract.
"I haven't discussed these things with him yet. At some stage obviously I will do. But the day before probably our most important game of the season is not the time to be discussing it."