Why server control are not allowed inside literal server control
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Literal control is not a container (ie you cannot nest elements inside it).
It is similar to a label control, its designed to display plain text/html.
Have you considered using an asp:placeholder or better yet a regular HTML DIV?
Here’s a good article on the asp:Literal control.
http://www.c-sharpcorner.com/UploadFile/puranindia/LiteralControlASPNET11192009223739PM/LiteralControlASPNET.aspx