Manchester United have bowed to pressure and renewed efforts to keep Alex Ferguson at Old Trafford in a major role after he retires as manager next summer.

Just over two weeks ago Ferguson angrily announced he would leave United after falling out over the details of his future involvement, even hinting that he might join another club. But yesterday United said they had resumed talks with Ferguson, even giving him a pay rise for the coming season.

If Ferguson's outburst was a negotiating ploy, it seems to have worked. The board was heavily critisised by supporters and former players such as Eric Cantona for its stance and has now moved to heal the rift.

PLC chairman Roland Smith and United's chief executive Peter Kenyon met Ferguson and his representatives just over a week ago to smooth the waters and yesterday the club issued a statement.

"The board of Manchester United PLC will be entering into negotiations this week with Sir Alex Ferguson and his advisors to agree a package which will enhance the terms of his current contract with Manchester United, which terminates on June 30th, 2002. A consultancy agreement between Manchester United and Sir Alex that will begin on July 1st, 2002, is also being negotiated."

The job description has still to be decided, but all options are open as long as it does not interfere with team affairs and the job of Ferguson's successor.

There was great speculation over what upset Ferguson. Some reports said he was expecting an ambassadorial role but was offered a youth development post. Others suggested he wanted a seat on the board.

Another report concerned the amount, said to be £1 million, that Ferguson had demanded for 30 days work a year. Whatever the reason, Ferguson reacted by saying: "When my contract finishes next season I will be leaving Old Trafford for good. What the club was proposing [for his future] was not what I was led to believe."

The new talks are designed to avoid a repeat of this public breach. But with the financial side of any arrangement also yet to be agreed there is still no guarantee that a deal will be done. Either way, the club want the matter sorted out soon.