The £40m question: that's not a Chelsea contract is it, Sven?

The England coach Sven Goran Eriksson was being pressed to declare his intentions once and for all last night, as the Football Association waited to see if he would quit in favour of a lucrative job with Chelsea.

The England coach Sven Goran Eriksson was being pressed to declare his intentions once and for all last night, as the Football Association waited to see if he would quit in favour of a lucrative job with Chelsea.

A source close to the FA hinted that the Swede was about to announce he would leave the job after the European Championships in Portugal this summer. However, it was also reported that embarrassment at his courtship by Chelsea becoming public had led Mr Eriksson to agree a deal committing him to England until 2008.

Furious officials at the Football Association challenged the Swede to declare his hand after a tabloid newspaper published a photograph of him emerging from a meeting with the chief executive of Chelsea. Mr Eriksson was said to have been offered a deal worth £40m over five years. He has been linked with the London club ever since it was taken over by the Russian oligarch Roman Abramovich last summer.

Mr Eriksson avoided going to see Chelsea play yesterday, preferring to watch Charlton. He was also due to meet the FA's chief executive, Mark Palios, before announcing the England squad for a friendly game which will take place in Sweden on Wednesday.

A source within the FA said it was "very unlikely Eriksson will not be manager" for the European Championships in Portugal this summer but "there is no doubt he misses club management".

The England coach has a contract which runs until the 2006 World Cup, although the FA has recently offered him a two-year extension.

The FA is believed to have made contingency plans for his departure that involve the head of football development, Trevor Brooking, taking over in tandem with a coach such asMiddlesbrough manager Steve McClaren.

Meanwhile the current coach of Chelsea, Claudio Ranieri, ran out on to the pitch to take applause from all four corners of Stamford Bridge before his team's game with Wolverhampton Wanderers. Chelsea won 5-2.

Speculation about Mr Eriksson's departure from the England job began almost as soon as he took over in February 2001. The coach denied he was about to take over at Manchester United - whose chief executive at the time was Peter Kenyon. Mr Kenyon was lured to Stamford Bridge after Roman Abramovich bought the club last summer. In July Mr Eriksson was pictured visiting the owner in Belgravia but insisted their meeting was purely social. Then came the meeting with Mr Kenyon on Thursday, caught on camera by a photographer from The Sun.

The meeting took place only a day after Mr Eriksson and his girlfriend Nancy Dell'Olio had dined at the San Lorenzo restaurant with David Davies, executive director of the FA, and his wife.

Pini Zahavi, the agent who has been asked to find a new manager for Chelsea, confirmed last night that Mr Eriksson had met Mr Kenyon to discuss the job. "Thursday's meeting was business," he was reported as saying. "Sven has two years left on his contract with the FA and he could lose three games in Portugal and be off. Who knows? What is the big secret anyway?"