Chelsea expect to have manager lined up by Monday

Chelsea are expected to have their new manager lined up by Monday. Several senior players with uncertain contractual situations have been advised to wait until then, when the club's managerial situation will be clearer.

Since the departure of Avram Grant from the West London club last week a half-dozen names have emerged as candidates, among them, Roberto Mancini, the Inter Milan coach, who was ousted from his post on Thursday.

According to sources familiar with the situation, José Mourinho, the former Chelsea manager, has agreed a three-year deal with Inter, who had hoped to unveil him on Monday. This might be delayed, however, by possible legal action from Mancini, who said yesterday that he would “pursue the club in every possible avenue” for compensation over his dismissal.

Mourinho is due to fly to Tokyo next Tuesday for a charity match on June 7, which means he will not make it to Milan before June 9 at the earliest। Inter had hoped to reach a quick settlement with Mancini, but that scenario quickly evaporated after Mancini's statement yesterday.

“The club's decision [to sack me] is based on events which have gravely hurt my reputation and my honour,” the statement said. It is understood that Mancini is referring to, among other things, the leaking of tapped phone conversations between himself and his tailor, a suspected drug dealer who has served time in prison for conspiracy to commit murder. There is no suggestion, from either the authorities or the telephone transcripts, that Mancini was involved in or was aware of anything illegal. Sources close to his camp suggest that the timing of the leaks - a few days before the final Serie A match of the season two weeks ago - is suspicious.

Mourinho's replacement of Mancini is being described as the most expensive managerial move in history, with a bill that could cost the club close to £70 million. The Portuguese is expected to earn about £23million over the next three years, while Mancini is owed £37 million through to 2012, with a further £8million earmarked for his staff, whose contracts expire in 2010 and who have also been released.

Meanwhile, the Mancini dispute is having a knock-on effect on Chelsea's efforts to find a manager. The Italian has been among the bookmakers' favourites for the job, although his agent, Giorgio De Giorgis, has denied any approach. Mancini would have to reach a settlement with Inter before he could take on any new job.

It is understood that Inter want Chelsea to make Mancini a firm offer soon, as this would expedite a settlement with their former coach, with Chelsea taking up more of the financial burden. But with the intentions of Roman Abramovich, the Chelsea owner, unclear, Inter may find that they have just made one of the most expensive decisions in history.

What appears certain is that Carlo Ancelotti, the AC Milan manager, is not in the frame for the Chelsea job. It is understood that Ancelotti, who is on holiday near Geneva, recently met Abramovich in Switzerland. The meeting was purely “informational” apparently, with the Russian billionaire keen to find out Ancelotti's views on football in general and Andriy Shevchenko, in particular. At no time was the Chelsea vacancy mentioned, and it is understood that Ancelotti would not consider the job at this time. Nor is it likely that Chelsea would offer Ancelotti the position.