Kevin Keegan is facing an acrimonious end to his long association with Newcastle United this morning and the prospect of a multi-million-pound wrangle over compensation. Perceived humiliation over the club’s transfer policy appears to have made the manager’s position untenable and, although Newcastle have again insisted that he remains in charge, the timing of his departure seems to be simply a matter for the lawyers to dispute.

In a statement released this morning, the club have reiterated that Keegan remains their manager and that negotiations between him and the board continue as both parties seek a resolution.

"Newcastle United Football Club can confirm that discussions are ongoing between the board and Kevin Keegan," a statement read. "Both the club and Kevin would like to reiterate that Kevin remains as manager.

"He has not resigned nor has he been sacked, as has been confirmed in respective statements made by Kevin and Newcastle United Football Club."

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After farcical scenes that included bewildered fans demonstrating over the “sacking” of their hero, it is hard to believe that Keegan will stay for long — or want to — given his repeated clashes with the board. His departure could be confirmed today.

Keegan has been so at odds with the directors over transfers that some Newcastle players were among those to believe that club and manager had parted company yesterday lunchtime. It appears to have been only a reluctance to surrender the payoff on his three-year deal, worth up to £3 million a year, that stopped Keegan following through his threats to take his leave. Whether he jumps or is seen to be pushed, it seems highly unlikely that he will be seen in a dugout again.

The former England manager has been so impotent in recent days that, having angrily questioned the proposed sale of Joey Barton on Monday, it is believed he was told that every member of the first-team squad could be sold, irrespective of his opinion.

The directors have pushed their manager to the brink by dictating the buying and selling of players, but, bizarrely, they seem happy for him to continue for the time being. Perhaps they want to avoid more trouble from supporters who are in revolt over Mike Ashley’s stewardship. The crowd of 47,711 for the opening home Barclays Premier League match of the season, against Bolton Wanderers, was the lowest in more than a decade and there is talk of a boycott of the next fixture, against Hull City on Saturday week.

Suggestions that Dennis Wise and Gustavo Poyet — the Tottenham Hotspur first-team coach who worked under Wise at Leeds United — may take over from Keegan have led to further uproar on Tyneside.

Boardroom sources claimed last night that they had spent most of the day talking Keegan out of resigning, but there is no doubt who the fans will side with, even with mixed results since he took over from Sam Allardyce in January.

The humiliations heaped on him stretch back over several months, since Wise was brought in as executive director (football). Wise and Tony Jimenez, both London-based directors, were appointed by Ashley, the owner, to guide transfer policy, but their seizing of control has brought only conflict with the manager.

Those rows came to a head with the recruitment on Monday of Ignacio González, the Uruguay midfield player, and Xisco, the Spanish striker, even though Keegan had not scouted the players or approved their signings. He had been asking for a left back and Bastian Schweinsteiger from Bayern Munich, but was given neither. At the same time the club tried to offload Barton for £4 million to Portsmouth, even though Keegan had fought hard to retain the midfield player after his six-month prison sentence for assault.

A deal to sell Alan Smith to Everton also fell through, while the board tried to sell Michael Owen to any takers, despite Keegan imploring club officials to give the Newcastle captain a new long-term contract. Keegan had also been undermined by the sale of James Milner to Aston Villa last week.

In the circumstances, it is a surprise that Keegan, 57, has lasted this long, particularly given his temperamental history. But at his age and with his faltering record, to quit now would probably be to leave management for good.

In response to reports that Keegan had been sacked, the club said that they “wanted him to continue to play an instrumental role as manager of the club”. Whether he can endure further embarrassment is another matter.