As Walter Smith continues to savour this remarkable renaissance in his career, which will lead him to next week’s Uefa Cup final in Manchester, there has always been one lingering intrigue about his past. Back in 1998, when Smith left Rangers after seven years as manager, was he sacked or did he walk?

Yesterday, Smith at least shed a little light on the matter. Sir David Murray, the Rangers chairman, has a track record — an admirable one in a way — of not sacking people outright, and Smith was one such case. Another, even after all his disasters, was Paul Le Guen, with whom Murray went the extra mile in 2006-07 before the two men agreed on a divorce between club and coach.

So it was that Smith, in mid-eulogy about his club chairman yesterday, was suddenly asked if, in fact, the benign Murray had binned him as Ibrox manager ten years ago.

“I was nicely sacked,” Smith replied with a smile. “In many ways I felt within myself that my time was up anyway. I went to see David one day and explained it. This was at the start of the tenth season after Rangers had won nine-in-a-row. A number of the players were also coming to the end of their time and I just felt that it was time for change for everyone. I felt that the change would benefit everyone and, unfortunately, the chairman agreed with me.

“That was basically it. There was a bit of a willingness on my part to go, and there was the same willingness on the chairman’s side to let me go. It was the right decision for everyone at the time.”

No one — and certainly not Murray or Smith — ever believed he would return to Rangers as manager. Nor did anyone — Smith, Murray or even the most wildly optimistic Rangers fan — ever think that, with Smith’s return, a European final would be just around the corner for the club. After Rangers’ dormant and painful famine of recent years, it has been one of the most astonishing and thrilling revivals the Scottish game has ever seen. But it is also posing a problem for Smith.

Rangers have not been without their critics this season, with many openly aghast at the team’s dogged and even dull style of play. That charge is not wholly accurate, given the fine skills in the club’s midfield, yet Smith knows that improvement must come in the summer.

The question is, what happens if, with the introduction of more flair, the team gets weaker? And, more worryingly for Smith, can he ever hope to better this season? Will this not prove to be as good as it can get for Rangers?

“That thought has occurred to me, yes,” Smith said. “In my mind we could make changes, be a better team and a far more entertaining team, and not achieve what we’ve done this season. The margin for error from a managerial point of view is very slight.

“We’ve rode our luck and we’ve got to where we are. Next year we might not be as lucky. We could improve and then get a really tough opponent in the Champions League. Or we could go through on penalties or a last-minute goal. It’s the world we live in.

“I don’t think I’ve ever been afraid of the challenge. If you are afraid of failing then you’d never achieve. I didn’t come back here to Rangers to fail so that aspect doesn’t bother me. I don’t have the kind of ego that fears failure.

“As for our standard of play, what do people expect in the first year? I don’t think it’s possible to come in and achieve in a year. We’re going through a period of change and that’s what makes the progress this year — and getting to the final — a surprise to me. So credit to the players for doing it.

“Yes, we want to improve, though I don’t know by how many \. Regardless of the result of the Uefa Cup final, the fact that we’re still building means there may be a few more changes to be made. But who knows if the team will be better?”

Where once there was a financial carnage around Rangers, today there is prudence and calm. Three years ago the club was still stricken by the effects of a reckless £80 million-plus debt. Now the club is operating in an environment which seems to suit its manager.

“We’re now in a situation where possibly there is a realism about the finances in Scotland,” Smith said. “Rangers and Celtic have to compete with bigger clubs. That means that to achieve things we might have to sell one player to strengthen other areas of the team.

“Rangers invested a few years ago, but the club was criticised for overspending. Now I hope we can fend off offers if it’s right for us to do so. The European run has certainly taken a bit of the financial pressure off us. Now we can maybe look at getting one or two of the type of players in which we maybe otherwise couldn’t have afforded.”

Meanwhile, Smith appeared to knock stone dead the widely held view that he would rest a number of players against Dundee United tomorrow in order to save them for Zenit St Petersburg in Manchester on Wednesday night.

“I’ve got to pick a team to win the game, haven’t I?” he said. “I’ve already said that the backlog of fixtures is the one thing you worry about — getting injuries or suspensions. But we can’t look at Saturday as being any different from any other match. So I’ll pick a team that I think is best suited to win the game.”