The Magpies supremo is expected to offer the job to the former Bolton boss for the second time following Roeder's departure yesterday.

Shepherd insisted at the weekend that he had not spoken to Allardyce either before or after he announced his decision to leave the Reebok Stadium despite fevered speculation that he was on his way to St James' Park.

However, it is understood that his availability and his track record with Bolton will prompt Shepherd to renew his interest in the man he tried to land as Sir Bobby Robson's successor in September 2004.

On that occasion, Allardyce rejected Newcastle's advances and although he was touted for the job once again following Graeme Souness' departure in February last year, Roeder's performance as caretaker earned him the nod.

However, the 51-year-old former Magpies skipper's reign came to an end yesterday, although his decision was only confirmed by the club this morning in a statement released through their official website.

It said: "Newcastle United today announced that Glenn Roeder has offered his resignation as team manager with immediate effect and this has been accepted by the Newcastle United board."

Neither Shepherd not Roeder have yet elaborated on the development, which came 24 hours after fans protested outside St James' Park in the wake of Saturday's 2-0 home defeat by Blackburn which finally ended hopes of European qualification.

Allardyce, who was also a serious candidate for the Sunderland job during the summer before Roy Keane was appointed, was immediately installed as a hot favourite with bookmakers Ladbrokes suspending betting at 1-4.

Former skipper Alan Shearer is a popular candidate for the future, although he has shown little appetite to return to the fray just yet and in any case, has not yet collected his UEFA A Licence, let alone the Pro Licence.

The names of Mark Hughes, Sven-Goran Eriksson, Steve McClaren and Sevilla's Juande Ramos among others have been thrown into the hat by the rumour machine with varying degrees of plausibility, but it is Allardyce, who has also recently been linked with Manchester City, who will be the major focus.

That, however, would leave Newcastle with a sizeable compensation bill to pay with more than two years of his Bolton contract still to run.

After the excesses of Graeme Souness' reign, in which £50million was spent on players, much of it badly, cash is at a premium on Tyneside and that could have a knock-on effect for the new manager's summer transfer kitty.

The Magpies currently have debts of around £80million, much of which is secured against future season ticket sales, and with the time for renewals now fast approaching, the club cannot afford a major revolt.

Predictions of Allardyce's arrival have not been met with overwhelming approval on Tyneside with critics pointing to Bolton's style of football under his charge and the allegations, which he strongly denies, made against him by the Panorama investigation into football.

However, there is little doubt something had to be done after Roeder reached the end of the road on Saturday, when his side failed to score in a fifth successive home league game for the first time since 1951.

Mark Jensen, editor of fanzine The Mag, said: "It has been bubbling under. With Glenn Roeder being well liked as a player and as a captain and then coming to work with the Academy, there was a lot of goodwill towards him.

"Graeme Souness did not have a lot of goodwill when he came in, so there was nothing to be eroded then.

"I don't think many people will take great pleasure in Glenn Roeder leaving the job, whereas with Souness, there was dancing in the streets.

"But Alkmaar away (when Newcastle went out of the UEFA Cup on away goals despite taking a 4-2 lead to Holland) was the real straw that broke the camel's back"

Number two Nigel Pearson is expected to take charge for Sunday's final day trip to relegated Watford with coach Lee Clark, who was called back from a scouting mission to Argentina having arrived in Paris en route yesterday, standing by.

In the longer term, Roeder's successor faces the task of assessing an expensively-assembled, but seriously under-achieving squad and rebuilding it for the challenge which lies ahead.

Albert Luque, a £9.5million signing from Deportivo la Coruna, is expected to head for PSV Eindhoven on loan after spectacularly failing to make his mark in the Premiership, while Titus Bramble, Craig Moore and loan signing Oguchi Onyewu were unlikely to be offered new deals under the previous regime.

The future of Turkish midfielder Emre has been in some doubt despite his reprieve from allegations of racism, while the Magpies have failed to see the best of the likes of Celestine Babayaro, Stephen Carr, Kieron Dyer, Charles N'Zogbia and Damien Duff in recent months.