Sven-Goran Eriksson's future as England coach was looking increasingly precarious last night after the Football Association launched an urgent inquiry into revelations about his affair with a secretary.

The FA was forced to retract its denial of Eriksson's fling with former model Faria Alam after it was reported that she also had an affair with FA chief executive Mark Palios.

Last night, FA chairman Geoff Thompson said that while the inquiry into the scandal was ongoing, he was satisfied Palios had not misled the FA.

But Mr Thompson made no such reassuring statement on Eriksson's behaviour, sparking speculation over the Swede's future as England coach.

He said the inquiry would report to a special board meeting on August 5.

Eriksson's personal manager, Athole Still, said last night: "We are pleased there is going to be a proper investigation so this whole matter can be cleared up."

Last week, the FA denied that Eriksson had an affair with Ms Alam, from Ponteland, Northumberland, a former model employed by the FA as a personal assistant to executive director David Davies.

But on Sunday, following fresh revelations, the organisation admitted that both Eriksson and Palios had relationships with Ms Alam.

Eriksson, 56, is on holiday in Sweden and is not expected to return to England until next week.

Ms Alam is also away from the office.

In March, Eriksson signed a multi-million extension to his contract to remain as England coach until 2008 on a reported salary of £3.5m a year.

It is not the first time the Swede's private life has hit the headlines. Two years ago it emerged that Eriksson had an affair with TV presenter Ulrika Jonsson.

Eriksson's long-term partner, Nancy Dell'Olio, was reported to have been outraged at the latest revelations and allegedly ended their relationship.

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