NEWCASTLE chairman Freddy Shepherd last night categorically denied that he had held talks with Terry Venables about the vacant managerial position at St James' Park.

Venables emerged as the front runner for the Newcastle manager's job yesterday after media reports suggested he had held initial discussions with the United chief.

The former England boss was reported to be on Tyneside as Shepherd stepped up his search for Sir Bobby Robson's successor.

But the United chairman has dismissed speculation linking Venables with the job, insisting he did not meet the former England boss yesterday.

"Terry Venables has not been here," said Shepherd. "I have not spoken to Terry Venables and I cannot remember the last time I saw him."

Neverthless, Newcastle's board are understood to be considering offering Venables a short-term contract to the end of the season as they weigh up their options in the light of Robson's dismissal.

Venables would assume complete control of first-team affairs, although it is hoped Alan Shearer would have some input in a coaching capacity, with United chiefs reassessing their options in May.

But Venables is believed to have told his associates that he is not interested in any temporary arrangement and would only consider taking the job if he was offered a two-year deal.

The former Tottenham, Barcelona and Leeds boss has taken on a short-term role before, helping Middlesbrough to avoid relegation three years ago after Bryan Robson had threatened to take them into the First Division.

The 61-year-old is not keen on managing Newcastle with the threat of being shuffled aside next summer hanging over his head.

The possibility of Venables taking over at St James' Park has been given short shrift by United fans who remember the Londoner's failed attempts to turn Leeds United around two seasons ago.

But Newcastle chiefs are keen to appoint a British coach with a reputation for discipline - and Venables fits the bill.

The suggestion of a nine-month deal is interesting, as it hints that United have a long-term target in mind.

Venables ended the day as favourite with bookmakers Reuben Page at 4-6 and Gordon Strachan at 3-1 and other contenters 5-1 or greater.

Birmingham chairman David Gold issued a new statement yesterday promising he would fight tooth and nail to keep Steve Bruce at St Andrews but, while the Blues boss was initially lukewarm to a potential Newcastle approach, sources in the West Midlands suggest he is gradually warming to the idea.

Bruce signed a new five-year deal in the summer and, while he has walked out on clubs in the past, the former Manchester United defender is aware of the criticism he would receive if he deserted Birmingham next week.

A summer move to Tyneside would be met much more sympathetically, especially with a get-out clause being triggered in a three-week period during May and June.

Birmingham would be due £5m in compensation if Bruce was to move now - a figure that would drop by £2m if the Magpies were to wait for the summer.

Newcastle have not ruled out a formal approach to Bruce next week and, with money in the bank following the sale of Woodgate, Shepherd could be tempted to offer £3m now if Venables is removed from the equation.

Birmingham's latest statement suggests that will not be enough, with the club maintaining: "It is categorically denied this board would consider any offer of compensation to release the manager from his recently signed contract.

"The relationship between the club and the manager is a strong and loyal one.

"Both parties are focused on building upon the success already achieved and we are all committed to the future of the club."

Nevertheless, Birmingham will find it hard to hold onto Bruce if he decides he does not want to remain at St Andrews.

Alan Curbishley and David O'Leary remain strong candidates, with both understood to be keen on a move to St James' Park.

Curbishley may well feel that he has taken Charlton Athletic as far as they can go, while O'Leary is known to be disappointed at chairman Doug Ellis' lack of transfer activity this summer.

Martin O'Neill is still a part of the equation, although sources close to the Celtic boss have made it clear that he has no intention of leaving Parkhead this season.

That situation could change in the summer, although O'Neill's long-term ambitions are still understood to reside at Old Trafford.

l Newcastle's medical staff are confident that midfielder Nicky Butt will be fit for next weekend's Premiership home game with Blackburn.

Butt was examined on Tyneside yesterday after being ruled out of England's World Cup qualifier against Austria.

Titus Bramble is expected to return to training on Monday following his hamstring injury, while Olivier Bernard should also be back in action.

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