The replay of the Football League Cup final would prove to be very controversial with a penalty that decided the match, followed by a disallowed goal when it was adjudged that Terry McDermott handled the ball.

Liverpool manager Bob Paisley bought Kenny Dalglish from Celtic for £440,000, a record transfer fee between British clubs.

However, Callaghan's final season started with a call up to the England squad, and would play in the match against Switzerland on 7 September 1977[1] under new manager Ron Greenwood.

Match rules Team: 1 Chris Woods (GK) 2 Viv Anderson 3 Frank Clark 4 John McGovern (c) 5 Larry Lloyd 6 Kenny Burns 7 Martin O'Neill 8 Ian Bowyer 9 Peter Withe 10 Tony Woodcock 11 John Robertson Substitute: 12 John O'Hare Scorers: None Half-time:0–0 Competition:Football League Cup (Final) Date:15.00 GMT Saturday 18 March 1978 Venue:Wembley Stadium, London Attendance: 100,000 Referee: Pat Partridge Match rules:90 minutes.30 minutes extra-time if necessary.Match replayed if scores still level.One named substitute.

Report Report Report Team: 1 Ray Clemence (GK) 2 Phil Neal 3 Tommy Smith 4 Phil Thompson 5 Ray Kennedy  91' 6 Emlyn Hughes (c) 7 Kenny Dalglish 8 Jimmy Case 9 Steve Heighway 10 Terry McDermott 11 Ian Callaghan Substitute: 12 David Fairclough  91' Scorers: None Team: 1 Chris Woods (GK) 2 Viv Anderson 3 Frank Clark 4 John O'Hare 5 Larry Lloyd 6 Kenny Burns (c) 7 Martin O'Neill 8 Ian Bowyer 9 Peter Withe 10 Tony Woodcock 11 John Robertson Substitute 12 Scorers: Half-time:0–0 Competition:Football League Cup (Final) Date:19.45 BST, Wednesday, 22 March 1978 Venue:Old Trafford, Manchester Attendance: 54,375 Referee: Pat Partridge Match rules:90 minutes.30 minutes extra-time if necessary.Match replayed if scores still level.One named substitute.