Rui Costa was unveiled as the sporting director of the Lisbon club today, just two days after he retired from football while playing for the club.

At his official presentation the former Portugal international spoke of his desire to "give this club everything it deserves", but admitted that negotiations with Eriksson may have come to an end.

"He is one of an exclusive group of coaches who have the right profile to be coach of Benfica," Rui Costa said.

"But the situation doesn't allow us to hold out much hope and we have decided to look at other solutions."

The former England manager's future at Eastlands has been the subject of much speculation, with owner Thaksin Shinawatra expected to relieve Eriksson of his duties at the end of the current campaign and Portugal coach Luiz Felipe Scolari widely tipped as a successor.

Eriksson earlier revealed he has been approached to coach Mexico but insists it is not the right time to make a decision on his future.

The Mexican Football Federation have been on the hunt for a new coach since they sacked Hugo Sanchez in March, and are reportedly after a high-profile European coach, having shortlisted Jose Mourinho, Atletico Madrid boss Javier Aguirre and now Eriksson.

"I was called from Mexico," Eriksson told Esto newspaper. "My agent is the person who analyses the contract terms.

"I can just say I was contacted. However, it's not the right time to make a decision.

"The Mexico offer is not the first proposal. It is just one more and I will study it with my people.

"I have nothing clear yet. My relationship with Manchester City is still running, we have a tour now (to Thailand) and I will complete commitments.

"Then I don't know what is going to happen."

The former England manager admitted the idea of returning to national team management was tempting.

"Coaching a national team is always attractive, no matter if it is Mexico, England, Sweden or any other," he said.

"It's a big commitment for any coach. I'm glad to be offered to coach Mexico."

The 60-year-old suspects the latest job offer to come his way may have been down to City forward and Mexico international Nery Castillo.

He said: "Nery is a great guy and I love him. I know he will succeed in England.

"I know the contact from Mexico was possibly thanks to him, but if I decide to coach Mexico or not, it will not depend on Nery. It's a personal decision.

"The Benfica offer is also one more, just one more. The Benfica people are good friends. I have already managed the club and I have good memories."