Chelsea fear missing out on AC Milan coach Carlo Ancelotti.

The Sun says Ancelotti is the favourite to take over from Guus Hiddink.

But he has been in talks with Milan chief executive Adriano Galliani all week about extending his contract through to 2011.

Ancelotti said: "I'll stay on for next season at least. I'm used to all the reports - but it's not a problem."