Capello will choose Ferdinand or Terry as England captain

Then there were two. The great England captaincy audition is, Fabio Capello said on Wednesday night, down to two names and while he would not name the contenders it is understood that John Terry and Rio Ferdinand are the last men standing. Never has there been such an incentive for those two to stay out of trouble at Wayne Rooney's Ibiza stag do this summer.

Remarkably it appears that Capello and his backroom staff would have considered David Beckham as a genuine contender had he been based in England but they regard his new career in Los Angeles as incompatible with the role. The former captain need have no worries that his 102nd cap against Trinidad & Tobago on Sunday will be his last – he is, according to sources, very much part of Capello's long-term plans.

Beckham back in at the heart of the England squad; Michael Owen on the outside. Capello's new dawn has not been entirely predictable and he may yet return to Terry as the captain even though Ferdinand is regarded as the marginal favourite. Capello's admiration for Beckham, however, reveals just how little else there is coming through the ranks to pressurise the men once regarded as the nation's golden generation of footballers.

On the captaincy, Capello said: "I have the summer to decide. I have not decided, but I have two ideas. That's enough for this moment. He must be a leader and be an example on the pitch. I want him to be someone so that when he speaks the team wants to listen to him." The new man will be named ahead of the friendly against the Czech Republic on 20 August.

After four games, three victories, one defeat – and having inherited the expectations of one very demoralised football nation – Capello said that, at the end of his first season in charge of England, he could see potential in this team.

"It gives me encouragement," he said. "It is impossible to get to the final of the Champions League with nine [eligible] English players and not have high quality. Impossible. It wasn't only foreign players in the United and Chelsea teams, but English players. And these are good players."

Capello said that he believed he had 16 players in mind who will form the core of his squads for the World Cup qualifiers. "The most important thing, and I think you know this, is that I know there are 16 players at the same level whom I can change [use] every game." The most interesting name not on the list is the out-of-favour Newcastle striker Owen who still has much to prove to the new manager.

The strikers understood to be on Capello's list are Wayne Rooney, Peter Crouch and Jermain Defoe who the Italian believes is the only player who gives his team an option of the quick ball over the top. Owen has played just one half for the new England manager and pulled out of the two end-of-season friendlies with what was described as a "contagious virus" that, nevertheless, did not prevent him from attending Wembley to watch the USA game.

What else has changed about Capello? His English has improved to the extent that he is able to use the word "humility" with confidence. The England manager is big on humility. "I have seen they [England players] have a good attitude, good concentration and humility," Capello said. "This is very important, humility. Humility on the pitch during the game."

"It is higher than I expected," is how Capello described the technical quality of his players. "I think back to when I started as England manager, and what I thought. Now, after four matches, I see the quality is very high."

For a manager who has tended towards the conservative for so much of his career, Capello also said that he believed his team had to be confident enough to, in his newly acquired English, "take risks". "At this moment, in the last two games I saw very many positive moments in all the players during the games, saw them playing with confidence," he said. "You can lose, but you have to be willing to take risks. If you are not confident in yourself, you will never take risks."

Sam Wallace's England squad

*Fabio Capello's possible 16-man core squad for the 2010 World Cup qualifiers: Goalkeeper: David James; Defenders: Wes Brown, Jonathan Woodgate, John Terry, Rio Ferdinand, Ashley Cole; Midfielders: Steven Gerrard, David Beckham, David Bentley, Frank Lampard, Owen Hargreaves, Gareth Barry, Joe Cole; Strikers: Wayne Rooney, Peter Crouch, Jermain Defoe.

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