Darren Ferguson is considering his future at newly-promoted Championship club Peterborough United.

The Daily Mail says Ferguson is on a collision course with Peterborough over the club's compensation demand, which could wreck a move to Reading.

The Peterborough manager is on a three-man short list for the vacant job at the Madejski Stadium and is believed to have an escape clause in his contract which would allow him to leave Peterborough for a five-figure sum.

But Peterborough director of football, Barry Fry, is demanding £1million in compensation for Ferguson, who has led Fry's club to the Championship after two successive promotions, and a further £1m should he guide Reading to the Barclays Premier League.

Reading may turn to Swansea's Roberto Martinez or Watford's Brendan Rodgers.