City are currently in a state of limbo as their long drawn-out takeover saga drags on, with the club having confirmed this week that talks with 'interested parties' have moved from 'preliminary' to 'advanced'.

They have already lost out on Claudio Ranieri, who chose Juventus this week because he was not prepared to wait any longer for former Thailand prime minister Thaksin Shinawatra's bid to happen.

So now City must consider other options, with former Liverpool boss Gerard Houllier the bookies' favourite to take over.

And former Everton boss Walter Smith, manager at Goodison Park when Houllier was in charge of Liverpool, has backed the Frenchman to again make a major impact on the Premiership if he returned to England.

Smith, told the League Managers Association website, leaguemanagers.com: "Gerard is an obvious target for Premiership clubs who would take into account what he has done at both Liverpool and Lyon.

"I do not think that there's any doubt that whichever club gets Gerard will be handling one of the best managers throughout the whole of Europe."

Smith, now back as Rangers boss after a spell in charge of Scotland, added: "There is no doubt he could again make an impact in the Premier League.

"He made an impact there before and he did a great job at Liverpool when he was across the city at Everton. He's continued the level of success at Lyon and people should never underestimate that, although Lyon had four championships in a row when Gerard joined.

"That is not an easy situation to take over because it is never easy to keep it going all the time."

City will not be able to replace Stuart Pearce until the takeover situation is cleared up, with a formal bid still not expected until next week at the earliest.

Another former Liverpool boss Graeme Souness is also being linked with the Eastlands post, but Sevilla chief Ramos is now planning talks with the Spanish club over a new contract.

They are unlikely to conclude until the end of the La Liga season with the club still in the title race and in the Copa del Rey final against Getafe on June 23.

City would desperately want a new manager before then as their summer drifts on without new arrivals or direction. They have already lost Sylvain Distin while Joey Barton is on his way out.

Ramos has helped turn Sevilla into one of Europe's leading sides during his two years in charge, including winning back-to-back UEFA Cup titles.

The 52-year-old's current contract has one year left and although he could leave this summer if his buy-out clause is paid, Sevilla are looking to tie him down to a new deal.

A club spokesman told PA Sport: "He is in discussions with the club in order to get another contract."

He added: "At this moment, Juande publicly always says that he is happy here. He wants to continue and is waiting until after the league and cup to get a meeting with the president in order to make the arrangements for a new contract.

"When he talks about the future he always says 'at this moment I work for Sevilla, I am happy here, I am not thinking about change. I think that I will continue at Sevilla next season.'

"But the most important thing now is the end of the league and the cup final and later we will talk about the future."