Alex McLeish has been unveiled as Birmingham City's new manager. McLeish resigned from his post with Scotland yesterday afternoon just hours after the Scottish Football Association denied Birmingham's request to talk to him.

The 48-year-old has signed a three-and-a-half-year deal with the West Midlands club and admitted the lure of the Premier League and day-to-day management was a significant factor in his decision.

He said: "The Scotland campaign was over and I really thought long and hard about staying on. I knew of some interest in the Premier League and had a desire to get back to day-to-day football.

"I really enjoyed my time in the Scotland job, it was a good period for me which was not day to day but allowed me to rekindle my appetite for the club scene again.

"I've come to a club in great tradition in football with a fervent and fantastic fan base. I look forward to the challenge."

McLeish, who left just ten months into his job with the SFA, still had two years of his three-year deal to run, and had seen his stock rise meteorically after Scotland's impressive Euro 2008 qualifying campaign, which included a 1-0 win over France in Paris.

Meanwhile, David Gold, the Birmingham charirman, warned the protracted takeover deal with Hong Kong businessman Carson Yeung is looking increasingly unlikely. Prospective owner Yeung had refused to sanction a new contract for Steve Bruce, the former Birmingham manager, who has subsequently left to join Wigan Athletic.

Gold admitted takeover rules which forbade Birmingham giving Bruce an improved deal but allowed them to appoint McLeish was strange.

"It's bizarre in the sense that the takeover board wouldn't allow you to enhance an existing contract," he said. "However it is quite in order, in the event that that contract ends, it is within the power of the board to offer a brand new contract to a brand new person.

"It is a bit unusual and it surprised us, that's why we got legal clearance about what we could do."

Asked about the takeover, Gold said: "I started off believing the bid was 90 per cent assured and a couple of weeks ago I reduced that to 75 per cent. Now I believe it's only 50 per cent but only time will tell.

"The [current] board must actually take charge of the club and fully act as if the takeover doesn't happen, that's why we brought in Alex and are looking forward to the future."

"We are working on the basis the deal will not go ahead. If it does, that's another story. David [Sullivan, co-owner] and myself have been at this football club nearly 15 years and that's how it will continue until things unfold and we see where we are going in the future.

McLeish, meanwhile, admitted he is aware of the financial situation he will be in with regards transfers.

"I know the parameters and I'm comfortable with that," he said. "I've always had a desire to come to the Premier League. I'd love to be managing in the Premier League for a considerable time."

The move to Birmingham will see him renew a city rivalry with Martin O'Neill of Aston Villa, who was at the helm at Celtic when McLeish was Rangers manager.

Coaches Roy Aitken and Andy Watson, who were part of McLeish's backroom team at Scotland, have also made the move to St Andrews.