The fallout from Avram Grant’s controversial sacking by Chelsea took an intriguing twist yesterday when it emerged that the Israeli has appointed Anthony Julius, one of the country’s most high-profile solicitors and best known for representing Diana, Princess of Wales, in her divorce from the Prince of Wales, to negotiate his severance terms.

Grant is understood to have been unhappy with the payoff offered by Peter Kenyon, the Chelsea chief executive, after two days of talks over the weekend, as it contrasted unfavourably with the £12 million José Mourinho received in the wake of his dismissal last September. He has brought in Julius to help secure him a better deal.

Grant’s decision to recruit such a high-powered advocate indicates that his relationship with Chelsea could turn nasty, a remarkable development given that he was originally given the job of first-team coach on the strength of his friendship with Roman Abramovich, the owner. The Israeli has told friends that he felt betrayed at the manner of his dismissal, being told that he was being sacked only on Saturday morning when it had been an open secret in football circles for several weeks.

Julius, a consultant with Mishcon de Reya, the London law firm, was also used in conjunction with Daniel Naftalian, a partner at Mishcon, when Grant was given a new four-year contract by Chelsea last December, with the result that his salary increased from £980,000 to £2.4 million a year. Julius, 51, is best known for achieving a £17 million judgment for the late Princess, but also received fame for successfully defending Deborah Lipstadt, the American historian, against a libel suit brought against her by David Irving, the Holocaust-denying historian. He also acted for Heather Mills in her divorce from Sir Paul McCartney.

Chelsea have yet to decide on the man they want to succeed Grant as manager, with the board and Abramovich’s various advisers divided over who to approach. Kenyon, Bruce Buck, the chairman, and Eugene Tenenbaum, Abramovich’s right-hand man, met yesterday in London to discuss how to resolve a crisis of their own making, but no firm resolution as to how to proceed was agreed upon.

The West London club are prepared to wait to secure the right man, which may be just as well as several of the leading candidates are busy preparing for next month’s European Championship finals, while the development of factions within the club’s hierarchy makes a delay even more likely.

Tenenbaum has told the owner that Chelsea need a strong manager to regain control of the dressing-room, leading him to champion the cause of Guus Hiddink, the Dutch coach of Russia. As well as an impeccable CV, Hiddink has a reputation as a disciplinarian and enjoys a good relationship with Abramovich. Eugene Shvidler, another of Abramovich’s key aides, has mentioned Dick Advocaat, another Dutchman, whose stock is high after leading Zenit St Petersburg to victory in the Uefa Cup final.

Kenyon is talking up the credentials of Mark Hughes. As well as being impressed with Hughes’s work at Blackburn Rovers, the chief executive is also acutely aware of the need to appease the fans and Hughes was a popular player during his three-year stay at the club in the 1990s.