Steve Clarke resigned as Chelsea’s assistant first-team coach yesterday evening to pave the way for a move to West Ham United, where he will work in a similar capacity under Gianfranco Zola, the new manager.

The former Scotland defender has agreed a three-year contract at Upton Park and his appointment will be announced in the next few days, once the club have agreed a severance package with Chelsea. The West London club are demanding £1.2 million in compensation because Clarke has two years left to run on his contract.

In a statement released this morning, Chelsea said they had not accepted Clarke's resignation and insisted talks were ongoing.

"Chelsea can confirm that West Ham have made an approach with regards to talking to Steve Clarke," it read. "They have not been given permission to talk to him.

"Steve Clarke has tendered his resignation as assistant first team coach. We have not accepted his resignation. Talks are continuing."

Clarke’s decision to sever ties with Chelsea that go back more than 20 years came as a shock to the club, with a series of meetings with Peter Kenyon, the chief executive, failing to bring a change of heart.

Luiz Felipe Scolari, the Chelsea manager, also attempted to persuade Clarke to stay, arguing that the Scot owed him a debt of loyalty after he allowed him to stay on this summer and claiming that his departure so soon after the start of the season would reflect badly on the club. But after four years as No 2 at Stamford Bridge, Clarke’s mind was made up.

"Now I have been told he is going I am sad but I understand Steve," Scolari said. "All people have projects in their life. I don't agree with his decision but I am happy for him because I like Stevie.

"I like him as a person and as a coach and I wish him all the best. Yesterday I invited Steve to visit my house and we discussed the situation between West Ham and Chelsea."

"I told him what I thought and this morning told (chief executive) Peter Kenyon what I think about Steve, that he is very important for me and for Chelsea.

"He is a man that is a link between me and the players and between me and the staff. He knows Chelsea very well and English players and clubs.

"When he told me about his projects I said to him I could be the man who would open more chances for him to be the head coach in England or in other countries. And I said I would give him more responsibility at Chelsea and would tell the press that Steve wanted to fly alone in the future.

"I don't know what happened in the night but when I came here in the morning I heard he had resigned."

Clarke has been seeking a way out since José Mourinho left the club a year ago, despite the award of a new three-year contract in the light of the Portuguese’s departure. Clarke did not enjoy a close relationship with Avram Grant, Mourinho’s successor, although he was given wide-ranging responsibilities to take training by the Israeli, which shored up his position.

It is understood that Clarke has been effectively sidelined since Scolari was appointed in the summer, with the Brazilian relying almost entirely on Darlan Schneider, his other assistant, whom he brought with him from Portugal. Whereas Clarke was close to Mourinho and all his assistants, it is understood that he has not been invited into Scolari’s inner sanctum.

Although joining West Ham will be viewed as a backward step in some quarters, Clarke considers the opportunity to take charge of the coaching at a Barclays Premier League club as too good to refuse, as well as relishing the opportunity of linking up again with Zola, with whom he played for two years at Chelsea.

Clarke’s departure is a setback to Chelsea because he was very popular in the dressing-room, particularly with the English core of John Terry, Frank Lampard and Joe Cole. The club have no imminent plans to replace him.

While many West Ham fans will oppose the appointment of an individual with such close ties to their rivals, it will also go down badly with Chelsea supporters because Clarke was voted into their team of the century three years ago and was the last surviving link with the preRoman Abramovich era. The 45-year-old made 421 appearances for the club between 1987 and 1998, before returning as youth-team coach five years later.