Martin O’Neill will rule himself out of the running to be the next England head coach in another huge blow to the Football Association. The Aston Villa manager, widely tipped to succeed Steve McClaren, will confirm today that he wants to stay in the Midlands, which will leave the governing body to see whether there is interest from potential foreign candidates such as Jürgen Klinsmann, José Mourinho or perhaps even Rafael BenÍtez.

O’Neill is understood to be uneasy about ruling himself out of a job that has not been offered to him, but, with speculation feverish, he has decided to clarify his future after talks with Randy Lerner, the Villa owner. They met in the United States last week and have established long-term plans to take Villa forward.

The revelation that O’Neill, who has not ruled out managing England one day, does not want to be considered now will come as a huge disappointment to Brian Barwick, the FA chief executive, who is a big admirer.

O’Neill’s withdrawal from the race almost certainly means that the next England head coach will not be from the British Isles. “Nationality doesn’t necessarily have to be an issue,” Barwick said yesterday, knowing that he will almost certainly have to look to a foreigner.

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The faults that lie deep within the nation's football will not be cured simply by handing Steve McClaren his P45

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Alan Shearer has been mentioned as a dark horse, but the appointment of the former England striker would represent a massive gamble. He has not managed at any level. The FA needs to be certain that the next man can reach the 2010 World Cup in South Africa. England will discover their group rivals on Sunday.

Mourinho would be a hugely popular choice, but while a close associate confirmed to The Timesyesterday that he would listen to an approach, it is questionable whether he would genuinely be interested in two years of intermittent qualifiers and friendlies. He has previously stated that the only international coaching job to interest him was with Portugal, and then only at the end of his club career.

The former Chelsea manager did express his sadness for England. “Without them, the tournament [Euro 2008] will not be great,” he said. “It’s a pity that top players like Gerrard, Terry, Lampard, Cole and Ferdinand will not be there.”

Klinsmann would be a daring choice and not just because he is German. Like Mourinho, he also watched England’s defeat against Croatia on Wednesday, having paid $24.95 to see it on pay-TV at home in California. An Anglophile who is ready to return to work, he has strong views about how to coach, which includes employing a huge team of specialists.

Benítez emerged as a surprise, if distant, contender last night as fresh doubts emerged about his long-term future at Liverpool after another breakdown in communication with the club’s American owners, George Gillett Jr and Tom Hicks. The Spaniard was in a dark mood yesterday and said he might be tempted by the FA’s vacancy “if I improve my English”. Later, when asked if he was joking, he insisted that he was not and that he was “serious” in what he had said.

McClaren and his assistant, Terry Venables, were dismissed yesterday after England’s failure to reach Euro 2008. McClaren’s advisers have yet to agree compensation on the 2½ years left on his contract.