Eriksson agrees £6m pay-off to step down after World Cup

The Football Association last night came to an agreement with Sven Goran Eriksson on a compensation figure understood to be about £6m that will see the Swede step down as England coach after the World Cup finals this summer.

The "fake sheikh" sting by the News of the World that disclosed Eriksson's discussion of corruption in the Premiership on Sunday precipitated talks yesterday between the England manager, the FA chief executive Brian Barwick and the Swede's agent Athole Still which reached a conclusion late last night.

Eriksson said that going to the World Cup knowing it would be his last month in charge of the team would not affect his commitment. He said: "I am happy that we have reached this agreement and can now continue our preparations for the World Cup. I know that I have the full support of the players and the FA and it is important to stress to everyone just how committed I am to achieving success this summer.

"I care passionately about this job and I want everyone to know that. I have always enjoyed the incredible support of the fans and I know how important they will be to us in Germany. This summer is the culmination of everything we have been working towards over the last five years. Let's go and win the World Cup."

Barwick said: "The FA and Sven felt it was important to clarify his future. This is for the benefit of everyone connected with English football, especially the fans. There has been so much speculation surrounding this matter in recent weeks and months, it was important to resolve it now. This is the right outcome and I would like to thank Sven and his advisers for their tremendous co-operation.

"As I have said before, our main objective is giving Sven and the England team the best chance of achieving success at the World Cup. Sven is definitely the man to lead us in Germany.

"Now is the time for everyone to get behind the team as we prepare for a tournament that presents us with a genuine chance of success."

Despite the embarrassment caused by the "fake sheikh" sting that has unfolded in excruciating detail over the last few days, Eriksson and Still remain convinced that their legal position is unimpeachable and that the Swede has done nothing to breach the terms of his contract. The generous deal that the former chief executive Mark Palios gave to Eriksson in March 2004 has discouraged the FA from removing its manager up until now but it has been forced to confront the issue by the latest scandal to envelop the Swede. While the judgement made by Still in accepting the hospitality of the News of the World's undercover reporter, he is certain that he will be able to enforce the terms of Eriksson's contract with the FA. With Eriksson having already claimed that he earns £3m net annually, it promises to be the most expensive sacking in the history of the FA.

The FA had always hoped that Eriksson would leave after the World Cup finals with his stock high and a number of top European clubs interested in his services. Any salary package that he could command from a new employer would significantly reduce the liability the FA would have to bear in terminating the remaining two years of his contract.

With that no longer a possibility, it would seem unlikely that Eriksson, even if he won the World Cup with England, would be able to negotiate a salary package even close to the one he had been given by the FA for the next two years. Should he come out of the World Cup finals with his reputation further tarnished then he may struggle to get a job in the highest echelon of club management.

Eriksson attended a meeting yesterday morning at the FA, where he was told that he would no longer have a job as the England manager beyond the World Cup finals. After that he and Still were interviewed by the FA's compliance unit, which deals with corruption in football over the allegations they made between them about irregular transfer dealings at three Premiership clubs.

Eriksson and Still have no evidence of this corruption and they told the compliance unit that they were simply gossiping over dinner. The compliance unit does have the power to bring charges against the England manager for bringing the game into disrepute, although given the circumstances it is highly unlikely.

The search for Eriksson's successor will not begin in earnest until Barwick has settled the terms of the Swede's pay-off, but the new regime has not ruled out the possibility of another foreign manager. The only certainty is that it will not take a manager on a part-time basis in which he shares duties for the national team with a club job.