Portsmouth will make a new contract offer to manager Avram Grant.

The Guardian says Andrew Andronikou, the Portsmouth administrator, will offer Grant improved terms to stay as manager in the hope that will be enough to persuade the Israeli to turn down any approach from West Ham United.

Andronikou said that were Grant to leave Fratton Park, Portsmouth would "hang out for as much compensation as possible" and consider an internal replacement in Paul Groves, the assistant manager.

Grant is the favourite to succeed Gianfranco Zola, who was sacked by West Ham yesterday.

Andronikou said: "I've been talking to Avram for two and a half weeks now regarding his position. I understand he's in a very invidious position, while the club's future is unsure. But I certainly wouldn't like to be looking for a new manager, especially with the transition between playing in the Premier League and the Championship."

Despite the club's perilous finances Andronikou said he would offer Grant better terms. "Absolutely. We're discussing that anyway. We need someone to drive the football club on," he said. "Avram is a diamond in the rough."

Grant is thought to earn about £450,000 a year. West Ham, who are involved in a dispute with Zola over the terms of his dismissal, would face having to pay Portsmouth compensation.

Andronikou said: "Its like any compensation claim - he has three years left so we would try and hang out for as much as possible. And when it came to any possible replacement we might appoint internally. Paul Groves has experience with Grimsby [Grant's assistant was manager there for more than two years until February 2004]."