Eriksson back with £50m to spend

Eriksson and Shinawatra are finalising a contract, with the former England manager asking for an annual salary of £2.5 million while Shinawatra is sticking to his original offer of £2m a year over three years, plus £1m in potential bonus payments each season.

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Shinawatra is prepared to offer the job to Blackburn's Mark Hughes if Eriksson does not back down but talks yesterday brought both sides close to a resolution and an announcement is expected early this week.

Eriksson's first job will be to complete a detailed audit of the squad with Shinawatra, the controversial former Thai Prime Minister, promising at least £50m worth of funds to renew the team.

Although Eriksson would like to bid for Newcastle's Michael Owen, it seems unlikely the England striker would consider a move unless to a team of Champions League quality.

Shinawatra and his advisers are set on Eriksson, despite an initial backlash from fans. Manchester City legend and former owner Francis Lee, who has agreed to sell his 7.13 per cent stake to Shinawatra, has added his voice to the protests, saying Hughes would be a better choice.

'I would prefer Mark Hughes, a British manager,' said Lee. 'Sometimes to get the best people, you have to "poach" them from other clubs.

'It will cost compensation but it works out far more expensive if you pick the wrong manager and he spends millions on bad players.'

Although agent Jerome Anderson set up the deal with Shinawatra, Eriksson's agent Athole Still is now telling friends that he is involved in the deal.

Shinawatra is likely to complete his £81.6m takeover next week when his formal offer to all shareholders is sent out.

With BSkyB, who own 9.9 per cent of the shares, likely to accept, he will then own 65 per cent of the club, having already agreed to buy stakes from chairman John Wardle, his business partner John Makin and Mark Boler.

Smaller shareholders are likely to allow him to reach the 75 per cent threshold he needs to take the club off the stock market.

His bankers, Seymour Pierce, have vigorously defended Shinawatra's probity, even though Thai prosecutors have filed corruption charges which accuse him of helping his wife to buy government-owned land for less than its real value four years ago. The Thai Supreme Court will make a decision on the case on July 10.

The former Prime Minister, who was ousted in a military coup last year, has seen his assets in Thailand frozen by the current government but is said to have at least £150m in British banks.

Sources close to Seymour Pierce say those funds had been cleared by the banks involved and lawyers working on the deal and had satisfied the Takeover Panel.

Shinawatra would fail the Premier League's 'fit and proper person' test only if he were convicted of corruption.