McCoist, who became the Ibrox club's record goalscorer during his glittering 15 years as a player there, gave up a lucrative television career to return in January 2007 as Smith's assistant.

Chairman Sir David Murray has revealed that while there is currently no formal agreement for McCoist to succeed Smith, it is his intention to appoint the former Scotland international if the current management team prove successful.

"I would have thought, all things being equal, that he will become manager," said Murray, who celebrates the 20th anniversary of his acquisition of Rangers this weekend.

"I hope he gets it. It hasn't been talked about, but it is an understanding among us.

"Walter and I discussed it when he came back, that McCoist would come in, hopefully we would get back to a successful period and then he would get the chance.

"It will be success driven. If we are successful, if Walter is successful then the natural successor would be McCoist. But if we go another two or three years without winning the league then we will all be under pressure."

Murray admits he did not regarded McCoist, 46, as a potential manager when he bought the club on November 22, 1988.

But he believes beneath the light-hearted public persona lies a fiercely ambitious individual.

"He didn't come back to Rangers for the money," Murray said.

"He came here for a lot less than he was earning. You wouldn't have thought of him as a manager 20 years ago, would you?

"But he has a very strong mentality. He is bright and makes a good coaching team with Kenny McDowall, so why shouldn't he become manager?"

For that to happen, he and Smith must find a way of ending the recent dominance of arch-rivals Celtic, who have won the championship for three straight seasons for the first time since the Jock Stein era.

Murray admits Rangers' shock failure to reach the Champions League group stage this season was financially bad news for the club but still believes they boast enough resources to win the SPL.

"Celtic are strong right now, they have done well and you can't take anything away from them," he said.

"We must respond. It all depends on what happens on the park. We have players good enough to beat Celtic, we have already done that this season.

"On their day, they have players capable of beating us. The future of Scottish football is that Rangers and Celtic will continue to compete against each other.

"We are at a big disadvantage this year because we don't have European income, but I still think we've got a good enough squad to win the league.

"We were rudderless and going nowhere until Walter came back. We asked him to steady the ship. He gained a bit of ground and then could well have won the league last season. I don't think there is any doubt our European run affected it. Fair-minded people would see that.

"Celtic have the money from the Champions League this season, which everyone is assuming they will spend in January, but let's see if they do.

"But there is no doubt this is the wrong year for us to be spending money, what with going out of Europe and the financial restrictions right across the globe. It is very concerning. Every one of us has to be more financially prudent in our daily lives and we are no different as a football club.

"I don't think much will change, other than we will reduce the size of our squad and definitely have to bring in younger Scottish players to make up the balance of the squad. If we don't start doing that, then there is no point having the Murray Park training academy."