Birmingham boss Alex McLeish has started negotiations with club owner Carson Yeung over a new contract.

However, McLeish is happy to let his advisors thrash out the financial aspects of the deal.

McLeish told Press Association Sport: "We have started negotiations regarding a new contract. I have met Carson and (vice chairman) Peter Pannu. They gave me some initial figures. I'll get my advisors now to meet with them and will let them thrash it out."

The Scot joined Blues two and a half years ago and has transformed their fortunes after the initial disappointment of being relegated from the Barclays Premier League.

He led them to promotion last season and has helped to establish City in the top 10 of the Premier League during the current campaign and also reach the quarter-finals of the FA Cup.

Meanwhile, McLeish is adamant that he will spend wisely the money made available to him by Yeung for new signings in the summer.

He said: "We need to improve again and enhance the squad and there will be money to spend but there has got to be prudence.

"I said during the January transfer window that I felt I had an obligation, a duty, to make sure that Birmingham go forward with a little bit of stability.

"There was an opportunity to purchase £10million players and pay them £100,000 a week but I had sleepless nights with that one.

"The owners agreed that wasn't the way to go."