Manchester City manager Pep Guardiola maintains he is happy with his squad after reports of an impending post-season clearout emerged in the aftermath of the Champions League defeat to Monaco.

City, undermined by a listless first-half display, lost 3-1 at the Stade Louis II on Wednesday to bow out of Europe's top competition on away goals as the round-of-16 tie ended 6-6 on aggregate.

Guardiola made nine signings during his first transfer window as City boss last year, sending three of those out on loan and waiting until January for Gabriel Jesus to arrive from Palmeiras.

Newspaper reports this week suggested the playing staff at the Etihad Stadium remains some way short of Guardiola's vision, with up to 18 players said to be under threat.

Six of those are senior professionals who have contracts due to expire at the end of the campaign, including Yaya Toure.

The 33-year-old midfielder told Sky Sports on Friday that he wishes to remain at City, before his outspoken agent Dimitri Seluk typically muddied the waters by claiming talks with other clubs were underway.

Pressed on the Toure situation at a news conference to preview Sunday's crunch Premier League clash with Liverpool, Guardiola maintained his stance that such decisions would be taken in due course and looked to quell talk of him liberally wielding the axe.

"I knew that. [Toure] expressed in the media what I knew months ago," he said.

"All those issues [out-of-contract players] we will talk about at the end of the season.

"I'm so happy with the squad, I have said so many times.

"The speculation is normal when you're out of the competition, it happens everywhere, not just the Premier League.

"I am so happy working with these guys. We are going to improve with a lot of these guys. Next season a lot of these guys will be here.

"Lessons can be learned, that's pretty sure. For a lot of my players it is the first time they've played in this competition.

"We can't play the way we did in the first 45 minutes [at Monaco], that's why we are out. But over the two legs, I am very happy.

"We have to improve and we are going to try and be more stable next season. There is a big gap to improve."

Injury plagued captain Vincent Kompany is another City player whose future appears to be in the balance, with the centre-back again missing out on the matchday squad at Monaco despite a recent return to fitness.

"I left him out because he's been injured for a while and it would be a risk to put him in if he might get injured again," Guardiola explained.

"That's why I would like a little bit more time with him to be sure... But we're so happy with his progress."

With or without Kompany, a City backline that endured a torrid midweek outing face another stern test against Liverpool, as ex-Bayern Munich boss Guardiola looks forward to another showdown with his former Bundesliga rival Jurgen Klopp.

The Merseysiders are a point and a place behind City in fourth spot, having played a game more.

"Klopp is a top coach," Guardiola added. "He likes to attack all of the time. He has a top team and he's a top trainer. I respect him a lot.

"Qualification for the Champions League will be tough for everybody until the last day of the Premier League."