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Eriksson on warning from Man City chairman Thaksin

Manchester City could be rocked by the end-of-season departure of manager Sven Goran Eriksson, it has been revealed.

The Observer says City owner Thaksin Shinawatra is understood to have been upset by Eriksson's failure to replicate the positive results of his early months at Eastlands and his handling of the squad. If he is replaced, City's first choice as replacement is believed to be Portugal coach Luiz Felipe Scolari, who will become available after his country's Euro 2008 campaign is over.

A City source said: "Thaksin rang Sven to reprimand him, telling him he would be sacked at the end of the season if results did not improve."

It is further understood that agents attempting to negotiate deals with City in recent weeks have been told not to factor Eriksson into their equations because the club does not necessarily expect the manager they appointed last summer to be present for a second season at there.

Benfica and Valencia are monitoring Eriksson's situation.

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