United hand Ferguson £2.5m-a-year deal

Hitzfeld's decision to stay at Bayern forces Old Trafford manager to delay retirement

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James Lawton: Wisdom prevails for Ferguson and United

Eventually, he was for turning. Sir Alex Ferguson's decision to ask to stay on as manager of Manchester United was motivated by many things, not least money, his own hunger for the game and the club's stuttering inability to even open negotiations with a possible successor.

Manchester United yesterday confirmed to the Stock Exchange that they had opened talks with Ferguson over extending his tenure at Old Trafford which began in November 1986 and which was to have ended in May, although the club did not say whether he would be staying for two or three more years.

Of all those who have refused to be considered for a very short shortlist, it was the news from Rome that would have triggered United's board into treating Ferguson's request for two more seasons seriously.

Once Sven Goran Eriksson, Martin O'Neill and Bayern Munich's Ottmar Hitzfeld (Ferguson's favoured candidate) ruled themselves out, there was really only Fabio Capello left, which is why the announcement by Roma's vice-president, Ciro di Martino, that their coach would honour his contract, which expires next year, struck Old Trafford hard.

Ferguson and Hitzfeld could have had a fine working relationship and would have allowed the outgoing manager to wield an influence behind the scenes. But Hitzfeld, a man of honour, refused to walk out on his contract at Bayern Munich and left United looking for alternatives, putting Ferguson on the spot. Ferguson decided to fill the void himself and the board were left in no position to argue.

When announced, Ferguson's new contract will be at least the equal of the £2.5m a year Arsène Wenger earns at Highbury and represents a two-thirds increase inside a couple of years. Even when he won the treble in 1999, Ferguson believed his talents were not sufficiently rewarded by the United chairman, Martin Edwards.

Although Ferguson turned 60 on New Year's Eve, he has long talked about retiring. In 1996 he gave an interview to the Manchester Evening News in which he hoped: "I would not be putting out the cones [on the training ground] at 58."

However, those close to him doubted he could ever fully turn his back on United except to a powerful position behind the scene. When his retirement was announced two years ago, Bryan Robson, Ferguson's first captain at United, stated he would find it too much to bear. Certainly, Bill Shankly, who built up Liverpool in the same single-minded way Ferguson transformed United, bitterly regretted his decision to retire in 1974. He was 60 when he left, the same age Ferguson is now.

"Every Manchester United fan will thank God," said Paddy Crerand, a member of United's 1968 European Cup-winning side and now a Manchester radio commentator. "There must be more pressure managing Manchester United than any other club and people don't know the hours he puts in there. He certainly has the desire to carry on and you could see the disappointment on his face at Middlesbrough when they lost in the FA Cup... he's just as hungry for success as he's always been."

If Hitzfeld, who has won the European Cup with Borussia Dortmund and Bayern, is to eventually succeed his friend at Old Trafford, then extending Ferguson's tenure by another two years would make sense. Hitzfeld's contract with Bayern Munich ends in 2004, but privately he believes Rudi Völler will not make a success of Germany's World Cup campaign and has told Ferguson he has his sights on leading his country into the 2006 finals on their own soil.

If it is not to be Hitzfeld, then a two-year extension may create more problems than it solves. Both Capello's contract at Roma and O'Neill's at Celtic expire in 2003. While insisting they would hold on to Capello until the end of next season, Di Martino hinted they might not then stand in United's way. "After his contract is up, I cannot say," said the Roma vice-president. "He is an excellent coach, the number one, and there is no doubt he would do a very good job for United."

However, by holding on for two more years, Ferguson would not only safeguard the position of his brother, Martin, United's chief scout, and help his son, Jason, who has negotiated recent transfers, including the sale of Jaap Stam to Lazio, he would also promote the cause of Roy Keane. The United captain would then be approaching 33, and naming Keane as manager with Ferguson as a hands-on advisor would have many attractions.

A new deal for Keane will be one of Ferguson's priorities as will the settling of David Beckham's contractual negotiations which have dragged on for nine months. Despite the welcome given to the news by his father, Ted, Beckham knows that Ferguson will insist he signs a new contract or submit to being sold.

It is no secret that some on the Manchester United board -– but not the chief executive, Peter Kenyon – were perfectly happy for Ferguson to go. For all his success, they found his personality stifling and tried hard to prevent him remaining at Old Trafford even in an ambassadorial capacity.

However, the decision to keep him on will delight John Magnier and J P McManus, leading members of the Irish racing syndicate known as the Coolmore Mafia. They have become very close to Ferguson and major shareholders in Manchester United and they had long tried to persuade him to extend his tenure at Old Trafford with a view to his perhaps succeeding Edwards as chairman. With the Irish influence behind him, Ferguson has made United an offer they could not refuse.