Southampton will not appoint Jesse Marsch as their next manager after talks broke down, reports the Daily Mail.
The Saints were keen on making the American Nathan Jones’ permanent successor.
However, both parties could not agree on the structure and length of a contract.
The former Leeds United manager wanted longer than the short-term deal Saints offered.
The south coast club have suffered a financial blow as a result of sacking Jones on Sunday.
They parted with £4 million in compensation to bring the Welshman from Luton Town last November.
Jones signed a three-and-a-half-year contract when he replaced Ralph Hasenhuttl. Southampton will have to pay him compensation for the remaining years of his contract.
They were looking to avoid a similar situation with Marsch and may have offered him a deal until the summer.
He has rejected it and their search for a new manager continues.
First-team coach Ruben Selles will remain in charge and continue to take the team in training. The 39-year-old will also be in the dugout for Saturday’s match against Chelsea.
Selles is also an option for Southampton and could remain in interim charge until the end of the season.
The club are looking into the possibility of bringing in a more experienced coach to work alongside him.
They are at the bottom of the Premier League after four victories and 15 defeats in 23 games.
However, escaping the drop is still feasible, with just four points between them and safety.
Marsch was sacked by Leeds a week ago, and some Southampton fans would have had doubts about his chances of keeping them up.
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