Martin O'Neill may have priced himself out of the Magpies post and club officials have met with the former Southampton boss about the manager's position.
Newcastle eye Alan Pardew to replace sacked Hughton
Newcastle United were last night locked in talks with Alan Pardew to become their new manager.
After the sacking of Chris Hughton, Mike Ashley, the Newcastle owner, turned to Pardew, the former West Ham United, Charlton and Southampton manager, after sources in the north-east of England suggested that the demands of Martin O'Neill were too much.
For the past month Pardew has been mooted as an outside contender to replace Hughton, who was fired from his post on Monday, ahead of higher profile candidate such as O'Neill and Martin Jol, who yesterday resigned from his job as head coach of Ajax.
Since the start of the season Hughton, despite having brought the club back up from the Championship to the Premier League at the first time of asking, has been on borrowed time.
But two weeks ago, when O'Neill made it known he was keen to return to top-flight management after parting company with Aston Villa a week before the start of the current campaign, it appeared the Northern Irishman would be heading to St James' Park with speculation constantly surrounding Hughton's position.
Initially that appealed to owner Ashley, given O'Neill's status and CV.
It is understood, however, that when it became clear what O'Neill wanted in terms of salary, and bringing in his coaching team - loyalists John Robertson and Steve Walford - the Newcastle hierarchy started to balk despite their desire to up the market price for the club.
Pardew and his entourage would come much cheaper and he also developed a strong social bond with Derek Llambias, Newcastle's finance director.
Newcastle are impressed by the way Pardew took West Ham to a top-half finish in the Premier League, as well as an FA Cup final appearance, in 2006, and hope he can achieve similar goals with the Magpies. Although Pardew is well aware of the potential backlash if he takes over and does not get things right.
That is why he was involved in complex talks with Newcastle last night about not only his salary but which staff he could recruit and January transfer window budgets.
And at the back of Pardew's mind remained the prospect of not taking the job that is on offer but waiting to see whether he might have an alternative proposition at his former club, West Ham.