England coach Fabio Capello has signed a new contract through to 2012.

Capello has provided England with the perfect World Cup boost by committing his future to the team until after Euro 2012.

Capello's future had been the subject of intense speculation over the last few days after Inter Milan president Massimo Moratti admitted the 63-year-old was at the top of his shortlist to replace the departed treble-winning coach Jose Mourinho.

With a £9million-a-year salary on offer, a 50% increase on Capello's present £6million annual salary from the Football Association, it had been suggested the former AC Milan coach was being tempted.

However, having previously reached a verbal agreement with former FA chairman Lord Triesman to stay until after the next European Championships, by removing a clause in his current four-year deal that would allow either the Italian or his employers to activate a break following this summer's World Cup, Capello had indicated he was willing to stay.

"The FA can confirm that Fabio Capello is committed to managing the England team until the 2012 European Championship," said an official FA statement.

"An amendment to his employment contract was signed and exchanged today, with break clause options for both the FA and Fabio being removed."