Ferguson has been informally approached by London 2012 chairman Sebastian Coe about the role, but current England boss Fabio Capello could be a serious rival especially as the Manchester United boss has played down talk that he would be involved.

Capello's England contract runs out just before the Games and he has suggested he would love to end his career - he will be 66 then - at the London Olympics.

But Caborn, the Prime Minister's ambassador for the 2018 World Cup bid, told PA Sport: "If Sir Alex Ferguson can be persuaded then he should have the job, and I would encourage him to do so.

"Not only is he probably the greatest manager in the world but it would be a great statement for British coaching and British football."

Were Ferguson to agree to the role, it could help persuade the Scottish FA to relax their opposition to Scottish players taking part in a British team - they are fearful that to do so would threaten their separate identity within FIFA.

Capello said it is high time Britain had an Olympic football team, and he dreams of being involved.

The Italian told FIFA magazine: "I will be 66 by then and I will have reached retirement age. Then I want to travel and visit all of the ancient cultures that fascinate me so much.

"But I would also like to make another of my dreams come true by taking part in the Olympic Games, something that I was denied as a player, and something that still fills me with regret.

"I think it's only fair that Great Britain should have a football team in the Olympics, but it is up to others to decide how, and with which players."