THE Scottish Football Association’s pursuit of Michael O’Neill was last night described as being “in the balance” by a Hampden source.

The SFA have identified O’Neill as their preferred candidate to take over from Gordon Strachan, who departed in October after failing to secure a Russia 2018 play-off place, as Scotland manager.

The 48-year-old led his native Northern Ireland to the Euro 2016 finals – their first major tournament in 30 years – as well as a Russia 2018 play-off place last year.

The former Dundee United, Hibernian, Aberdeen and St. Johnstone midfielder, who still lives in Edinburgh, is under contract with the Irish Football Association until 2020.

But the IFA have offered him a lucrative four year extension to his existing deal and initial negotiations are said to have been constructive.

The SFA, though, are still hopeful that O’Neill, who has been in charge of his country for the past six years, will decide to move on and take over the running of the Scotland national team.

O’Neill now has to decide whether to remain with Northern Ireland, join Scotland or hold out for a position at a club side.

He has been courted by several English clubs as a result of his success with Northern Ireland and Barclays Premier League outfits Sunderland and West Brom have both been granted permission to speak to him this season. He has also been linked with a move to Rangers.

“The best way to put it is to say it is in the balance,” said the Hampden source.

The former Brechin City and Shamrock Rovers manager is keen to have his future sorted out before the end of this month as the draw for the inaugural UEFA League of Nations takes place in Lausanne on January 24.

The League of Nations gets underway in September and SFA chief executive Stewart Regan has admitted he would like to have the new Scotland manager in place by then as a place at Euro 2020 is up for grabs.

The national team will take part in a possible international friendly tournament against Morocco in March against their hosts, who are bidding to stage the 2026 World Cup, and Argentina.

However, the SFA are unprepared to pay over the odds for O’Neill, who earns £500,000 a year, and have also drawn up a shortlist with other potential candidates on it should he not be tempted by their offer.

The governing body, who approached their Irish counterparts for permission to speak to their manager in November, will have to pay compensation for O’Neill and are keen to know what the terms of his contract are before they proceed. They are expected to find out the fine details of his deal in the coming days. The source said: “We need to get the best deal for our members.”

If the governing body feels that it will cost too much to bring O’Neill in then they will move on to another of the names on their shortlist. Alex McLeish, Paul Lambert and Cesare Prandelli, the former Italy manager who is now in charge at Al-Nasr in Dubai, have also been linked with the position.

In October former Scotland manager McLeish said: “It would nice to get a call to see what their thoughts. There are a lot of good candidates out there. It was a short spell, but it was a really exciting time. It would be great to think the next coach or manager could get Scotland to a major finals. It is going to happen someday.”

Steve Clarke, the former Chelsea, Liverpool and West Ham assistant and West Brom and Reading manager, has done superbly with Kilmarnock since moving to Rugby Park in October and many members of the Tartan Army would like to see him considered for the role.