Defoe deal won`t end Spurs spending

The structure of the deal to bring the 26-year-old back, after leaving less than a year ago, means Spurs are not parting with what they view as a huge cash sum to seal the England striker's signature.

That will allow Spurs chairman Daniel Levy to continue negotiating for players such as Middlesbrough's Stewart Downing, with boss Redknapp wanting "three or four players" to bolster his squad for the second half of the season.

There have been suggestions in France that Spurs are looking at Lyon striker Fred, and the search for proven talent will restart when Defoe finalises his transfer.

The deal has to be ratified by the Premier League as there are guidelines preventing a player being transferred back to his original club within a year - but those rules are to guard against sinister dealings and Defoe's return is genuine.

Defoe left Spurs for £9million and although the value of his return means they will be paying more, instalments from previous deals to take players to Fratton Park formed part of the discussions between Levy and Pompey chief executive Peter Storrie.

Both clubs were understood to be happy with the transfer, with the structure of the deal meaning Spurs are not planning to announce their signing on the stock exchange, as they are obliged to do with deals worth more than £10million.

Another player in the frame to sign for Redknapp is Ghana midfielder Stephen Appiah, who has been on trial this week at Spurs.

Redknapp feels he needs to strengthen his squad in the long term.

"It's pretty obvious that we need to buy," Redknapp said. "It's a small squad, and its hard to find people just to come in. Appiah would be the type of person I was talking about when I was saying to get some loans in, he could come in and be a good player to have but if you're looking to really improve..."