GRAEME Souness and Freddy Shepherd were locked in a stand-off last night as Newcastle's crisis-riddled season continued to lapse into farce.

Shepherd has finally lost faith in his manager after Saturday's 1-0 defeat to Blackburn sent his side crashing into the bottom seven of the Premiership and sparked a mass demonstration outside St James' Park.

The chairman is not prepared to pay the £5m it would take to remove Souness and his backroom staff, and is still hoping a combination of fans' pressure and adverse publicity will force the Scot to fall on his sword.

That is unlikely to happen, with Souness continuing to insist both publicly and privately that he will not walk away from his duties.

The result is an unseemly stand-off in which neither figure is willing to cede ground or initiate talks aimed at producing an amicable agreement. In the meantime, Newcastle's players continue to drift aimlessly towards the Premiership drop zone, with Saturday's FA Cup trip to Cheltenham offering an opportunity for further embarrassment on national television.

There is no doubt that Souness is living on borrowed time but, unless Shepherd performs a dramatic U-turn and decides £5m is a reasonable price to pay for his removal, the Scot seems certain to be in charge when United travel to Whaddon Road at the weekend.

Sacking Souness would cost the Magpies around £3m, and the former Liverpool and Rangers boss has promised his backroom staff he will not cut them adrift by resigning.

His removal would leave the likes of Alan Murray, Dean Saunders and Phil Boersma in an untenable position, and terminating their contracts would add another £2m to the bill.

Given the Magpies' precarious financial position - there will be no new signings this month because of a lack of funds - such an expensive settlement is the last thing Shepherd needs as he attempts to turn his club's fortunes around.

Rumours of an early-morning showdown at St James' Park proved unfounded yesterday as Shepherd arrived at the ground while Souness was taking charge of first-team training at the club's Benton base.

The Magpies manager refused to comment on the situation at the end of the session, but eventually arrived at St James' at around 4.15pm.

He later emerged from a 15-minute meeting with Shepherd accompanied by Murray, stated "I remain the manager of Newcastle United", and left to continue his preparations for this weekend's trip to Gloucestershire.

Defeat to Cheltenham would surely signal the end of the line, although a clash over compensation is not the only factor currently keeping him in a job.

Shepherd has a short-term solution to any managerial vacancy close at hand, but the chairman is unwilling to sack Souness without a long-term replacement in place.

The struggle to replace Sir Bobby Robson continues to haunt the Magpies board. Ironically, they may not have found themselves in their current predicament if they had not been forced to appoint Souness when a number of their leading targets turned them down.

Should Souness be sacked before the end of the season, Shepherd would almost certainly turn to current Academy director Glenn Roeder, supported by skipper Alan Shearer and coach Peter Beardsley.

Interestingly, Beardsley was a surprise arrival at St James' Park yesterday morning and, while his visit is understood to have been related to Academy matters, it is quite conceivable that Souness' future was brought up in discussions.

Roeder, whose managerial career came to an abrupt halt after he suffered a brain tumour, is not seen as a long-term alternative because of his chequered record at West Ham.

Shearer is viewed as a future Newcastle manager but, given his lack of experience and coaching badges, handing him the reins in the summer would represent a massive gamble.

Instead, Shepherd is hoping to appoint a senior figure to work above the current number nine. Bolton boss Sam Allardyce remains favourite to succeed Souness but, after turning the job down following Robson's dismissal, he is unlikely to be offered a second bite of the cherry.

The constant speculation has rendered Souness' position all but untenable, but at least the Magpies manager was able to receive some rare good news on the injury front yesterday.

Turkish midfielder Emre and injury-plagued striker Shola Ameobi both took part in training, while England international Scott Parker is hoping to step up his recovery from a knee injury this morning.

While the paucity of their performances might suggest otherwise, Newcastle's players continue to offer the manager their undivided support.

"He's a brilliant man to work for," said full-back Peter Ramage. "He manages how he played, with 100 per cent commitment and determination, and it's good to see he's determined to turn it around.

"We are fully behind him. Every single one of those players in the dressing room is behind him, so it's hard for us to hear what the fans are chanting.

"They are entitled to their opinions. They pay for their season tickets and deserve to be entertained, but the position we are in is down to the players not the manager.

"He picks the team, but I bet he wishes he could get his boots on and help out. He's that kind of guy and I have nothing but admiration for him."

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