Newcastle United offered Sam Allardyce a surprise return as manager last week

Mike Ashley is understood to have identified him as replacement for Rafa Benitez

But there was an issue over the club's recruitment policy and talks collapsed

Newcastle appear focused on recruiting Steve Bruce from Sheffield Wednesday

Newcastle United offered Sam Allardyce a surprise return as manager last week, Sportsmail can reveal, but the former England boss has rejected the opportunity.

Owner Mike Ashley is understood to have identified the 64-year-old as a replacement for Rafa Benitez, not just because of his track record as a Premier League manager but because he would not cost any money in compensation.

ADVERTISEMENT

Sources close to the club say Allardyce, who has been out of work since leaving Everton in May last year, was presented with an offer after talks between senior figures at St James' Park and his representatives last weekend.

Newcastle United offered Sam Allardyce a surprise return as manager last week

Click here to resize this module

But there was an issue over the club's recruitment policy and a concern that Allardyce would have little if any say over signings. As a consequence talks collapsed and Newcastle now appear focused on recruiting Steve Bruce from Sheffield Wednesday.

Allardyce became Newcastle boss in May 2007, eight days before Ashley's takeover, and was sacked eight months later when the new owner moved to bring Kevin Keegan back to the club.

It is understood that Allardyce would have brought in former Newcastle midfielder Kevin Nolan as his assistant.

Bruce, 58, is understood to be at the top of Newcastle's shortlist, with formal contact expected to be imminent ahead of their Premier League Asia Trophy trip to China on Saturday.

Show Player

It is believed compensation of somewhere in the region of £1million would have to be paid to secure the services of the former Manchester United captain, who was born in Corbridge, 15 miles from Newcastle.

Allardyce became Newcastle boss in May 2007 and was sacked eight months later

Allardyce's appointment would have raised the tension that exists between Ashley and the club's fans following the departure of the popular Benitez.

While Allardyce made a strong start, securing five wins and two draws from his first nine Premier League matches, a poor run at Christmas and growing discontent among some supporters invited Ashley to endear himself to the fans by bringing back Keegan.

But Bruce is not winning any popularity contests in Newcastle either as a former Sunderland manager, with some fans calling for a boycott of the opening fixture of the Premier League season against Arsenal at St James' on August 11.

It is a difficult job for whoever takes over given the departure of leading scorer Ayoze Perez, strike partner Salomon Rondon, midfielder Mohamed Diame and loan signings Kenedy and Antonio Barreca.

The Magpies now appear focused on recruiting Steve Bruce from Sheffield Wednesday

On Wednesday Bruce played down the rumours when asked about them at pre-season training camp in Portugal.

He told the Sheffield Star: 'It's news to me. God only knows what happened on Tuesday afternoon. There seemed to be an upsurge [in the betting] from somewhere. John Terry was favourite yesterday. It was Mikel Arteta the day before, so who knows?

ADVERTISEMENT

'As far as I am concerned, I am here, I am going home tomorrow and looking forward to walking the dog.'

Bruce was appointed by Wednesday in February, four months after leaving Aston Villa.