New City manager Alex McLeish is allowing midfielder Kilkenny to extend his loan spell with Oldham where the Aussie has been getting regular first team action.

McLeish said: "I have spoken to his agent and we felt it might be wise to leave Neil out on loan or else we might look to move him on."

Striker Sone Aluko is also set to stay with Aberdeen.

"I spoke to Jimmy Calderwood about Aluko and have agreed he can stay at Aberdeen," added McLeish. "He is doing all right. Hopefully it will toughen him up a wee bit.

"Jimmy has said he has done well and he's brave enough, although slightly built. We will get a word as to what the length of term the loan can be or must be."

But midfielder Neil Danns is set to be released with Coca-Cola League One promotion contenders Nottingham Forest interested in the 25-year-old player.

Danns joined Blues from Colchester for $1.2million in the summer of 2006 but has struggled to hold down a regular spot at St Andrews.

Now McLeish has told Danns he will allow him to leave after delivering the same message last week to central defender Martin Taylor.

McLeish said: "We have spoken to Neil Danns and his agent and it's likely Neil will move on. There is some interest in him. Notts Forest have shown interest in him for a while.

"We would like to bring other players in next month and that's going to hold players back already here. Neil is a guy who at this stage of career should be getting first team football."

McLeish believes the time is still right for Taylor to leave even though Johan Djourou's return to Arsenal next month after a loan spell will leave City short of numbers in that department.

He said: "Djourou is going back but it's still the same situation with Martin. We feel it's better for the big fellow to move on. It's the right time.

"We need to make some changes and do things differently. I think QPR are still in the hunt for Martin but you will have to ask his agent on that one and find out where things are at."