Davies sacking opens door for McClaren at Nottingham Forest

A statement on the club's website said Davies's three-and-a-half-year contract, which had 12 months to run, had been "terminated with immediate effect".

Forest, who finished sixth in the league and crashed out of the play-offs for the Premier League in a 3-1 aggregate defeat to Swansea in the middle of May, look set to be McClaren's route back into English club management.

He left Middlesbrough in 2006 to succeed Sven Goran Eriksson as England manager.

Davies, 47, joined Forest in 2009 after previously being manager of their great rivals Derby County where he won promotion to the English Premier League via the Championship play-offs.

However, the Rams were ill-suited to life in the top-flight and Davies left in November 2007, just three months into the campaign. The former Motherwell manager had made the Championship play-offs twice with Preston North End between 2004 and 2006 and he did it twice with Forest, however the top-flight eluded the two-time European Cup winners and Davies's relationship with club chairman Nigel Doughty deteriorated.

Following the 17 May defeat by Swansea, Davies said his club would "prepare again for another excellent challenge next season".

However, Doughty and the Nottingham Forest board appear to have had other ideas. Two meetings between the manager and board to agree a way ahead failed, culminating in Davies's sacking yesterday.

The former Rangers player had a fractious relationship with his bosses at the City Ground, locking horns with director of football David Pleat - "or whatever his title is" as Davies told a Nottinghamshire newspaper - who heads Forest's "acquisitions panel".

"I am very confident that he (Pleat], with all his media commitments around the world, knows the market place," Davies told his interviewer in 2009. Curiously, in November last year, he commented: "As a manager, I will continue to appraise the squad and keep recommending.

"I am not moaning, I am recommending, appraising and evaluating. It is only confrontational because I have a Scottish accent. If I was Italian, it would not sound confrontational, would it?"

McLaren was vilified as "The Wolly with the Brolly" after failing to get England to the Euro 2008 finals and took a break from football before resurfacing as manager of FC Twente in the Dutch Eredivisie in 2008-09 where he won the league last season, a remarkable achievement given the usual dominance of Holland's big three - Ajax, Feyenoord and PSV. He departed to join German side Wolfsburg in May 2010, but struggled in the Bundesliga and was sacked in February of this year.

Since then, he has been linked with vacancies at Aston Villa and West Ham.

Forest now see McClaren as an ideal candidate to lead the club.

As assistant to Jim Smith, he helped Derby reach the Premier League in 1996 and went on to be Sir Alex Ferguson's number two at Manchester United.

McClaren, now 50, left after two years to join Middlesbrough in 2001.

He guided the club to League Cup success in 2004 - their first ever trophy - and to the Uefa Cup final in 2006, when they lost 4-0 to Sevilla.