Rule V7 issued by the FA states that player cannot be signed and then loaned to another Premier League club in the same transfer window.
Liverpool have been heavily linked with a £7m move for the 22 year-old for the majority of this window, after impressing during the first half of the season.
“This type of move would violate Premier League rule V7 regarding transfers so simply cannot happen,” Burnley chief executive Lee Hoos said.
“This is the last time we will be making any comment regarding the player’s future.
“Over the course of the window, the player himself, Sean Dyche and the chairman have made it clear he won’t be going anywhere and we consider that the end of the matter.”
Brenden Rodgers would therefore be forced to sign the Englishman on a permanent deal, meaning the Lancashire club can afford to raise their asking price.
By Phil Wellbrook