But the Ibrox boss has been boosted by the news that Kenny Miller will be fit for the trip to Celtic Park.

Novo was rated doubtful after hobbling out of the 2-0 win over Dundee United on January 31 with an ankle knock, and his worst fears when confirmed when he was told he faces another few weeks out of action.

The Spanish striker has had an impact in previous derby clashes and may be sorely missed by Rangers on Sunday.

Smith said: "Nacho will miss the Celtic game, unfortunately his ankle will keep him out of that one.

"We are disappointed to lose him because he is one of those players who has been starting in the team and playing well recently.

"Even as a substitute, Nacho is the type to come on and make a great impact so we'll miss him in this game and the next few we have coming up."

Striker Miller was forced to withdraw from George Burley's Scotland gathering this week with a hamstring problem.

But his withdrawal was for precautionary reasons and with, intensive treatment at Murray Park this week, he should be in the squad for the visit to the east end of Glasgow.

"It is a different situation altogether with Kenny and he will be okay for the match at the weekend," Smith told the club's official website, www.rangers.co.uk.

"He's getting a bit of discomfort at the top of his hamstring but the problem isn't actually in the muscle itself. He will be fine."