Smith confirmed yesterday that the Scotland international was a January target as he bids to bolster his squad this month.

Reports today suggested rivals Celtic could be set to move for the player instead and, speaking after tonight's 2-0 win over Hibernian in the Clydesdale Bank Premier League, Smith admitted a switch to Ibrox was now not going to happen.

He said: "There is nothing in that one, that one's finished with by the looks of things. There is nothing else for us to report on transfers."

The Rangers boss also played down speculation linking Allan McGregor with a move to Arsenal following TV reports that scouts from the Premier League giants were at Easter Road to see him in action.

Smith said: "How do you know they were watching him? There are probably about 20 scouts here tonight so how do you know they were watching Allan McGregor? Were they all watching him?

"We have 20 scouts at every home game, it's a natural thing that they come to football matches.

"I'm sure Arsene would have phoned me if he was wanting to take him and you will be the first to know if he gets in touch!"

Madjid Bougherra grabbed the opener, before Nikica Jelavic marked his first start in almost four months with a goal, having recently returned from injury.

Smith said: "I'm pleased that he managed to get a goal and play the length of time that he did. He's getting towards full match fitness with every game he plays so I'm pleased with that respect."

Jelavic was booked following a clash with Paul Hanlon but Smith did not feel the striker was in danger of a red card for the incident.

He said: "To be honest, I was speaking to the fourth official and I never actually saw it. But according to my boys, they didn't think there wasn't much in it. I'll take their word for it."

Hibs debutant, Richie Towell, who signed on loan from Celtic this week, was at fault for Jelavic's goal.

But boss Colin Calderwood is confident he has plenty to offer as the Edinburgh side bid to move away from the relegation zone.

He said: "Apart from that I think he had quite a sprightly debut.

"He's got personality and drive and he's got assets that will definitely help us between now and the end of the season.

"I think he's going to be a very worthwhile signing."

As well as Towell, Hibs also signed Martin Scott and Matt Thornhill and Calderwood expects more new arrivals before the end of the transfer window.

He added: "We are quite far down the line with one more. If there were two, that wouldn't be a surprise to me and hopefully there will be."