Alan Shearer took his first step into football management today when he agreed a new deal with Newcastle that will make him a player-coach.

Shearer, 34, had insisted all season he would retire at the end of the current campaign but has agreed a one-year extension to his current contract after a change of heart. The Magpies' captain confirmed at a St James' Park press conference that the persistence of manager Graeme Souness and chairman Freddy Shepherd had persuaded him to play on for one more season.

Newcastle, who are in the semi-finals of the FA Cup and the quarter-finals of the Uefa Cup, are well placed to end a 50-year drought without a major trophy and Shearer said: "The last two or three months have been great and I hope we can go on to bigger and better things.

"The spirit in the camp is fantastic and I want to be part of something which is happening here and I believe that will happen. It was a tough decision for me but I believe it's the right one for everyone concerned and more importantly the football club," he told Sky Sports News.

Shearer has scored 18 goals in all competitions this season and needs only ten more goals to surpass Jackie Milburn's 200-goal all-time club leading goalscorer record. He is confident that he can maintain his own form for another season.

"I am doing it because I think my performances have carried on at a level which I and the manager and chairman are content with and I think I can do that for another year."

A delighted Shepherd said: "It's the news every fan wanted to hear and certainly the news Graeme and the board wanted to hear. I think Alan's new contract will read player-coach."

Shearer, a former England captain, stressed that despite his change of heart at club level he has no plans to make himself available again for his country.

"No, that was the right decision many years ago and I think it proved to be the right one," he added.

Shearer, explaining the thinking behind his decision, said: "I sat down and had to analyse my performances this season. I probably haven't scored as many as last season but I feel I have contributed a lot more than I did last season or the season before.

"I had a hell of a lot of people to speak to. I spoke to managers, coaches, scouts, friends, players and players who have packed in and what came back was unanimous - they all said they felt I was playing too well to retire. I thought 'I can't retire just because I've said I would'. I was perhaps a bit hasty."

Souness revealed how he had played on Shearer's emotional attachment to the club as he set about persuading him to change his mind and play on for one more season. He added: "I'm delighted this morning and if all my signings are as good as this then I'll be extremely happy. I've said before I didn't think he was ready to pack it in.

"It's not just Alan Shearer on the pitch I want. I also want Alan around the place, he is an enormous help to me. I tried to get into his roots, into his head, telling him 'this is your club, the club you love, and if you really love it you have got to stay here and help me for another year to be a success and help the club challenge the big boys and win things'. And he has made the right decision for all the right reasons.

"I don't believe it was such a big decision for him. He loves this club, he has a hell of a lot to offer this club - not just goals but every aspect of this club."

Shearer has long being touted as a future Newcastle manager and his new role as a player-coach working alongside Souness and Dean Saunders looks like the first step along that road.

"Everyone knows I have started my (coaching) badges and the next step is to emphasise to the staff here that nothing changes from my side. Everything continues exactly the same," added Shearer.

Asked about Newcastle's chances in the FA Cup and Uefa Cup, Shearer said: "My intention is to win those two and go on to bigger and better things."

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