Sven-Göran Eriksson is confident that he can replicate the success he enjoyed at Lazio with Manchester City and create a team capable of challenging for the Barclays Premier League title, providing he receives sustained and substantial financial backing from Thaksin Shinawatra, the club’s controversial owner.

On the day when Thaksin was arrested and bailed in Thailand after returning to his homeland for the first time since being deposed as Prime Minister in a military coup 17 months ago, Eriksson felt sufficiently moved to talk up City’s chances of becoming English football’s next Chelsea in the coming years.

Thaksin has already spoken of his desire to make City as successful as Manchester United on and off the pitch, but while Eriksson believes that it will be “very difficult” to compete with their rivals in the global commercial stakes, the former England head coach sees no reason why the club cannot challenge for the title if Thaksin stumps up the cash needed to do so.

Lazio were in a not dissimilar position to City when Eriksson took charge in 1997 but, bankrolled by Sergio Cragnotti’s millions, the Swede guided the Serie A club to the Italian league title three years later.

Cragnotti is estimated to have spent about £274 million in just over four seasons, during which time Lazio also won the Coppa Italia twice, the Italian Super Cup, the European Cup Winners’ Cup and the Uefa Super Cup, but Eriksson hinted that, with a comparable level of investment, City could achieve similar success.

Thaksin has already spent more than £50 million on new players, as well as funding Eriksson’s lucrative £3 million-a-year contract and a series of new player contracts, since his £81.6 million takeover of the club last summer, but the manager is hopeful that such backing will continue as he seeks to transform the fortunes of one of the fallen giants of English football.

“There’s a massive way to go [before we can compete for the league title and challenge United], but I’m happy that he [Thaksin] talks in that way because that’s great and, if he wants, let’s give it a go,” Eriksson said. “I think it’s realistic [that we can be on the same footing as United in the future] if the resources are there.

“Remember that Chelsea was a good team, but only started to compete with Manchester United and Arsenal when [Roman] Abramovich came in. That was a huge scale of investment, but Thaksin doesn’t say that this season we should be competing with United and the others, he’s talking about the future.

“He wants to provide the money to compete. I know it’s very difficult, but I’m happy that he’s saying it because it means he has these ambitions.”

Eriksson added: “Everything is possible. When I went to Lazio they had a good team, but after the chairman [Cragnotti] spent money and we signed extremely good football players we were fighting for the title for three years and won it in my third year. We won titles in Europe and everything that was done there was done in three to 3½ years.

“In three years Lazio won seven trophies and that’s thanks to the money and the ambition the owner had. It would be very nice to repeat that here. We’ve never talked about the amount of money [Thaksin might spend] or about all the money involved. He’s just said, ‘Sven, find the players to compete at the highest level possible’. We have names and we’ll see what happens.”

Thousands of supporters greeted Thaksin at Bangkok’s main airport yesterday before he was arrested and taken to court to face corruption charges relating to alleged abuse of power during his time in office.

Thaksin, who denies all the charges, claiming that they are politically motivated, was granted bail and told not to leave Thailand without permission.