Villa finally get their man as Lambert takes charge

Norwich accept defeat in battle to keep manager but face fight to stop Holt taking same route out

Norwich City bowed to the inevitable yesterday and gave Paul Lambert their best wishes after he was appointed manager of Aston Villa. However, they announced last night that they had not agreed a compensation package with Villa. They must also now try to prevent their leading goalscorer Grant Holt from following Lambert. Holt has already had a transfer request turned down.

City initially refused to accept Lambert's resignation as their manager once he became aware that Villa wanted him to succeed fellow Scot Alex McLeish, who was sacked the day after the end of a poor season in which they finished 16th, only two points from relegation. In contrast, Lambert led promoted Norwich to 12th place, nine points above them. He held talks with Villa on Friday and compensation of £1m was believed to have been agreed.

Last night a statement from Norwich said: "We would once again like to place on record our sincere gratitude to Paul for everything he has done for the club. Everybody at Carrow Road wishes him all the best for the future. Some media reports are suggesting we have agreed compensation for Paul's services with Aston Villa, however this is not the case. We will continue to discuss this matter privately with Aston Villa."

The club added that they were already "actively" seeking a new manager. The former Norwich players Malky Mackay, now in charge of of the Carling Cup finalists Cardiff City, and Steve Bruce, who was sacked by Sunderland in November, were being mentioned as possible successors last night, although one leading bookmaker made Birmingham's Chris Hughton a short-priced favourite.

Villa confirmed the appointment of Lambert, 42, with a one-line statement on their website. It is understood he has signed a three-year contract. Villa held talks with the Molde manager, Ole Gunnar Solskjaer, but the former Manchester United striker wanted to remain in Norway for family reasons.

Villa also met representatives of Wigan's manager, Roberto Martinez, but stressed that Lambert was always their first-choice target to replace McLeish who lasted just one season at Villa Park.

Lambert, who secured two successive promotions with Norwich before steering the Canaries to mid-table in the Premier League last season, will be given money to refresh the squad by the club owner Randy Lerner, who wanted McLeish to reduce the wage bill last season. Lambert will be able to spend any funds he generates from off-loading players he decides to dispense with. The striker Emile Heskey, central defender Carlos Cuellar and the second-choice goalkeeperBrad Guzan have already left Villa at the end of their contracts.

Lambert, a former Scotland and Celtic midfielder who won the Champions' League with Borussia Dortmund in 1997, started his managerial career at Livingston before moving to England, where he worked in the lower leagues with Wycombe and Colchester before transforming the fortunes of Norwich who were struggling in League One when he was appointed in 2009.

"He has done very well with Norwich and the clubs he was at before then," said the Villa midfielder, Barry Bannan. "He has a good record up until now so hopefully he can be as successful with us as he has with his previous teams."

McLeish was never popular with the fans after arriving from arch-rivals Birmingham City, but Lambert's appointment appeared to be a popular choice. Jonathan Fear, from the leading Villa fans website, Vital Villa, said: "I think it is a smashing appointment. He was the number one target and they were prepared to wait for him. It is a good, solid appointment and he can have a look from top to bottom at what is needed at Villa."

Norwich's top scorer Holt also wants a move away from Carrow Road. Holt made his feelings clear on Twitter last week. His agent Lee Payne yesterday claimed that the 31-year-old forward had been told by Norwich that he was "too old" to be offered a three-year contract.