Zico, the legendary Brazil player, has emerged as the new favourite to replace Sven-Göran Eriksson as Manchester City manager. Thaksin Shinawatra, the City chairman, is understood to be preparing a formal approach to the 55-year-old, who is in dispute with Fenerbahçe, as he looks to forge a Brazilian connection that will be strengthened by the expected £18 million signing of Jô, the CSKA Moscow forward, and a renewed bid to sign Ronaldinho.

Zico has enjoyed success while in charge of Fenerbahçe, leading them to a first-leg victory over Chelsea in the Champions League quarter-finals in April, but he is expected to leave the Turkish club after a dispute over his contract, which expires at the end of next season, and over the treatment of his two assistants, Edu, his brother, and Moraci Sant’anna, who would be likely to follow him to Manchester.

With Eriksson’s fate all but sealed, City are poised to make a formal approach to Zico in the next seven days, having seemingly conceded defeat in their pursuit of Luiz Felipe Scolari, another Brazilian, who is in charge of Portugal.

City’s interest reflects Thaksin’s passion for all things Brazilian after the appointment of Roberto Carlos de Carvalho as their international head of youth development and would probably give some momentum to their bid to sign Ronaldinho, the former World Player of the Year, from Barcelona.

Although the bid for Ronaldinho appears a pipe dream to many, Thaksin’s associates have continued to hold discussions with Roberto de Assis, the 28-year-old’s elder brother and agent, in recent weeks and further talks are planned. They hope to persuade Ronaldinho that the appointment of a Brazilian coach – whether Scolari or Zico – would create an environment in which he can rediscover the form that he has rarely produced on a consistent basis over the past two seasons.

City are highly confident of signing Jô, the 21-year-old Brazil forward, with their close links with Kia Joorabchian, his agent, establishing them as firm favourites ahead of Everton and Tottenham Hotspur. “City are front-runners for Jô by a distance,” Joorabchian said yesterday. “Once their managerial situation is resolved, we’re pretty sure the deal will get done.”

Eriksson is resigned to his fate, having been told by Thaksin at the start of last month that he had fallen short of expectations in his first season at City. All that remains is to resolve a dispute over his compensation payment, with the former England head coach claiming that qualification for next season’s Uefa Cup, albeit only because of their fair-play record, entitles him to an additional £500,000 bonus under the terms of the contract that he signed last July.