Eriksson has no case to answer, says the FA, as all eyes turn to the PA with a story to sell

The future of Sven Goran Eriksson's as England manager was secured - in the short-term at least - last night when the Football Association said he had "no case to answer" about the sex scandal that has engulfed the game's governing body.

The announcement came after Mr Eriksson appeared before a meeting of the FA's board at a central London hotel. It ended weeks of speculation about his position following the revelation that he and the FA's chief executive, Mark Palios, had relationships, Faria Alam, a secretary there.

Ms Alam resigned her post in a letter faxed to the FA just after 6pm, her agent Max Clifford said. (She had been on leave since the scandal broke.) She is selling her story to two Sunday newspapers and a television channel for a reported £500,000.

Mr Palios resigned on Sunday night after it emerged that the FA's director of communications, Colin Gibson, had attempted to keep the chief executive's relationship with Ms Alam quiet in return for giving a newspaper more information on Mr Eriksson's affair.

Last night the FA accepted Mr Gibson's resignation, which was also offered on Sunday night. The FA Board said in a statement that "the entire episode has been regrettable for the reputation of football in this country". It said, "the board remain determined to restore the highest standards".

The statement said: "In the case of Sven Goran Eriksson, the board decided on the basis of the report [received from the FA's legal advisers] and on legal advice that there is no case for him to answer." It said the board had been "mindful of the need to follow standard procedures and employment law" in dealing with the matter.

Mr Eriksson was said to be "very pleased and relieved" at the verdict. When he heard the was told the news "he just said 'good', with a nice chuckle", his agent Athole Still said.

The News of the World broke the story of Mr Eriksson's relationship with Ms Alam on 18 July. Mr Eriksson's position then came under question after the FA released a statement a day later denying he had a relationship with Ms Alam and it allowed solicitor's letters to be issued to the newspaper.

Ms Alam was alleged to have insisted to her bosses at Soho Square that there was no relationship, while Mr Eriksson also reportedly told Ms Alam's boss, the FA executive director David Davies, that it was "nonsense". Then, on 25 July, the News of the World printed e-mails that forced the FA to retract its earlier statement.

The growing storm caused Mr Eriksson to issue a statement on 29 July saying that "at no time have I either categorically confirmed or denied any relationship with Ms Faria Alam". The News of the World followed up last Sunday with the devastating revelations that Mr Gibson had tried to get Mr Palios's relationship with Ms Alam hushed up, in return for "chapter and verse" on her relationship with the England coach.

The FA board's statement came after it heard a lengthy submission from the solicitor Peter Norbury, of its specialist lawyers Eversheds. About Ms Alam, the board said it was "not appropriate to make any public statement with regard to her role in this inquiry". It thanked Mr Gibson for his "services".

The statement also said that "deficiencies surrounding man- agement procedures have been exposed and the board is collectively resolved to see these corrected". Mr Davies, and the FA chairman, Geoff Thompson, escaped disciplinary action, although the chairmen of the FA's two main boards - Dave Richards and Roger Burden - have been asked to "support" Mr Thompson over the next few months while the association "commence the search for a new chief executive officer".

Ms Alam has done a deal with The News of the World and The Mail on Sunday. She will also appear on a television channel. Contenders for that interview are understood to include ITV's Tonight with Trevor McDonald, Sky and one other bidder.

It was reported yesterday that Ms Alam would be paid £200,000 by each of the competing Sunday papers and £100,000 from ITV. Other reports suggested Ms Alam might receive as much as £750,000 overall after magazine interviews in Sweden and Asia were taken into account.

Ms Alam secured the deals after Mr Clifford agreed to represent her on Wednesday, after days of talks. Mr Clifford said Ms Alam, who had been renting a home on her £35,000 a year salary, would probably buy a property with the money.

He said: "She has decided to talk to the media for three reasons: one is the money, the other is the fact that a lot of her close friends have misrepresented her, and the third is the way the FA has treated her. She's a very bright girl and they're very silly people."

Her decision to talk might cost her some sympathy, Mr Clifford conceded, but he said money was not the primary motivation. "She's been accused of having relationships with people she has never even met," he said.

Mr Clifford said his client was still "fond of Sven"and had spoken to him a few days ago. "She likes Sven; she's got a lot of respect for him," he said.