Stuart Pearce’s future as Manchester City manager appears increasingly bleak after the club last night gave Thaksin Shinawatra, the former Prime Minister of Thailand, the green light to proceed with his £92.5 million takeover bid.

Shinawatra has been granted a period of due diligence, where he will inspect the club’s accounts before making his offer formal, and is now the overwhelming favourite to win the three-way battle for ownership of City.

With the club eagerly embracing the proposal he made late on Friday, the 57-year-old, who has built his fortune through the Thai telecommunications industry, is firmly expected to see off rival bids from Ray Ranson, the former City player, and an American consortium.

Were Shinawatra’s bid successful, it would have repercussions for Pearce, even if any decision might be left to the existing board. John Wardle, the chairman, and Alistair Mackintosh, the chief executive, have misgivings about the 45-year-old’s prospects of taking the club forward after a disappointing second full season in charge, particularly after disagreements over his decision to coach England Under21 on a part-time basis.

Sam Allardyce is likely to be among those interested in the job, despite his reported alliance with the Ranson bid. It remains to be seen what impact a Shinawatra takeover would have on the City boardroom, but Mackintosh is likely to be retained as chief executive.