Liverpool, having decided on Brendan Rodgers as their manager, are expected to announce within weeks they intend to stay at Anfield, not build their long-planned new stadium on Stanley Park. Under plans drawn up by Liverpool city council and revealed to local residents, houses would be demolished to enable the club to expand Anfield's main stand.

At a meeting on 15 May attended by Ian Ayre, the Liverpool managing director, residents living in neighbouring streets to Anfield were presented with three worked-up options involving knocking down rows of houses. The council's assistant director for regeneration, Mark Kitts, told the Guardian that Liverpool have confirmed, in discussions with the council, that the demolitions would meet the club's requirements.

"We have been working with the club very closely," Kitts said, "and they have said this will accommodate their needs if they stay at Anfield and refurbish the current stadium."

Kitts said homes would be given "an open market valuation" – which he suggested could be upgraded to reflect an area in better condition – plus a 10% "home loss payment" and removal costs. Liverpool will not have to negotiate directly with residents or buy their houses. Kitts said the council has the option of applying for compulsory purchase powers, to force residents to sell, if necessary. Some home-owning residents are fearful that they will not receive enough to pay for a similar home elsewhere.

Liverpool's principal physical obstacle is not enlarging Anfield's footprint – their plan is understood to involve adding an extra tier, plus corporate facilities, to the Anfield Road and main stands. Doing so, however, would block the "right to light" of those neighbouring houses. Kitts said he believed the demolitions would "solve the right to light issues".

The plans, presented to a neighbourhood "stakeholders meeting", including the Rockfield Residents Association, all propose knocking down the row of terraces closest to the main stand, on Lothair Road. The second two options, more favoured, involve demolishing two additional rows of houses – both rows on Lothair Road, and the first on the next street, Alroy. The remaining houses are planned to be refurbished: one option suggests replacing the demolished houses with a commercial development, possibly a hotel.

Liverpool are still maintaining they are keeping open both their options – to expand Anfield or proceed with the new stadium on Stanley Park. However, the demolition plan, on which Kitts said the council hopes to begin work as soon as this summer, has convinced many local people that this is to facilitate Liverpool staying at Anfield. The council still favours the new stadium but Liverpool's owners, John W Henry's Fenway Sports Group, has made it clear since it bought the club that it would prefer to enlarge Anfield, mainly because it is cheaper.

Liverpool declined to comment on the revelation of the housing demolition blueprint, saying: "The private discussions and plans that Liverpool Football Club has or may have with residents or other stakeholders are, in our opinion, exactly that: 'private'."

Last week Ayre said Liverpool would "need to convince" residents if the club were to stay at Anfield, and said: "We're having some great dialogue with them."

However, Ros Groves, chair of the neighbouring Salisbury Residents Association, said she "hit the roof" when she read that. Her group has also been presented with demolition plans, for a corner opposite the main stand and Kop, which the club could develop commercially. But she said Liverpool have held no meaningful discussions with residents.

"I cannot see how it can be called 'great dialogue' when Ian Ayre has been to one meeting with one residents group," Groves said. "Everybody can see which way this is going now. We just want Liverpool football club to be open with us." Many houses around Anfield have been blighted for years – a significant number bought by the football club and left empty, a source of great resentment among residents left coping with the area's decline.

Some who own their homes, Groves said, fear were worried that that the money they would be paid by the council who will demolish them, will would not be enough to buy a similar home elsewhere.

"Everybody wants a solution to this area's problems," Groves said. "But people who have paid off their mortgages, and long-term tenants, are very concerned about the impact on them."

Liverpool was sold in 2007, to the Americans Tom Hicks and George Gillett, specifically so that finance would be found to build the new stadium on Stanley Park. After they failed to progress the new stadium, Martin Broughton, the chairman conducting the Liverpool sale, said any buyer would "have to accept" building a new stadium. But after FSG bought Liverpool, Henry always made it clear he favoured remaining at Anfield.