Former England coach Fabio Capello believes Pep Guardiola is prepared to sign a new contract with Manchester City.

Guardiola's current expires next summer.

But Capello, previewing City's Champions League clash with Real Madrid, says: “Man City is the new team. New history.

“(A) really important team in England - and I think they have a really important future if Guardiola stays with this team, like Ferguson with Manchester United.

“They (City) play really good football, but Guardiola is changing his style.

“When he was at Barcelona, he played the famous tiki-taka, but now it has changed a lot.

“When he recovers the ball, they go really quickly to create openings for the goal, with fantastic players like De Bruyne, Mahrez, Gabriel Jesus.

“It will be a spectacular game for me. It will be really interesting."