The Daily Mail says McClaren is on the verge of quitting Nottingham Forest after only five League matches in charge at the City Ground.
The former England coach will decide in the next few days whether to walk away from the East Midlands club to protect his reputation.
McClaren has returned to his family home in the North East to mull over a situation that has left him deeply unhappy with his employers following a lack of signings in the transfer window.
The former Middlesbrough boss, 50, is upset at the failure of Forest's board to support him when the club's promotion rivals in the npower Championship strengthened considerably.
A source said: "Steve came here in the hope of taking Forest up and was working on that basis.
"But he has always said that the squad needed bolstering in order to do that. He is disappointed and frustrated at the lack of further additions.
"He thinks he is short of what is required to lead the club to promotion. He's upset and is going away for a few days to think about things at the club."