Tim Sherwood will have an opportunity to stake his claim to succeed André Villas-Boas at Tottenham Hotspur after the club turned to their highly rated technical coordinator to oversee first-team affairs following the dismissal of the Portuguese.

Villas-Boas was dismissed in the wake of the home trouncing by Liverpool on Sunday with the Spurs chairman, Daniel Levy, unconvinced he could deliver Champions League qualification this season despite the club having spent £107m in the summer to revamp the squad.

He departed after 18 months in charge and with the team only five points adrift of fourth place but the psychological effects of heavy defeats by West Ham, Manchester City and then Liverpool had eroded the board's faith in his ability.

Sherwood, a former Tottenham midfielder, was a member of the coaching staff during the Harry Redknapp era and was under consideration for the role of technical director over the summer before Levy turned instead to Franco Baldini, then of Roma.

The club felt the 44-year-old Sherwood's talents lay more in coaching and he was duly granted the title of technical coordinator to oversee the under-21 development squad and youth set-up. His impressive progress with the junior sides has been noted, with Levy content to lean on him in the short term.

He will be assisted by Les Ferdinand and Chris Ramsey for the immediate future, starting with visit of West Ham in the Capital One Cup quarter-final and Sunday's trip to Southampton, while Steffen Freund and Tony Parks will continue as part of the coaching staff. With a burgeoning reputation Sherwood may become a contender to take the job, at least on an interim basis to the end of the season, if his initial stint proves successful.

Levy is considering his options and will sound out more experienced figures but he is still to determine the best approach, with many of those under consideration for the long term potentially out of reach until the summer at the earliest.

Principal among them is Fabio Capello, who is contracted with Russia until the World Cup finals but still owns a property in London and has worked regularly with Baldini throughout his career. The 67-year-old Italian would not represent a progressive appointment, however, and has not ventured into club management since leaving Real Madrid in 2007 prior to a four-year stint in charge of England, but he has the reputation and authority to take over at White Hart Lane. Capello was actually at Sunday's game as a pundit for Sky Italia when Liverpool won 5-0 to condemn Villas-Boas to the sack.

There is admiration, too, for Southampton's Mauricio Pochettino, though prising him away from the south coast club's ambitious chairman, Nicola Cortese, would be easier said than done. Luciano Spalletti, currently at Zenit St Petersburg, FC Basel's Murat Yakin – Baldini was in Basel for the Swiss club's Champions League victory over Chelsea last month – and Swansea's Michael Laudrup would also be considered.

Guus Hiddink, who had been favoured by the board as a natural interim appointment having fulfilled similar duties with Chelsea in 2009, is understood to have indicated a reluctance to take up the position. He will take up a permanent role with the Holland set-up after the World Cup.

Villas-Boas' dismissal was confirmed in a brief meeting with Levy at the club's Enfield training ground , after discussions between the chairman and the owner, Joe Lewis, overnight. The Portuguese had envisaged taking training as normal, having spoken at length with Levy and Baldini the previous evening, and had even arrived at the complex with Christmas presents for members of staff. He left towards the end of the afternoon – along with his staff José Mário Rocha, Luís Martins and Daniel Sousa – having said his farewells to the players, with his exit technically "by mutual consent and in the interests of all parties".

His team sit seventh in the top flight but the brutal nature of their defeats by West Ham, Manchester City and now Liverpool had undermined faith in his ability.

Levy and Lewis had been angered initially by the 3-0 home defeat by West Ham in October, a result which prompted an intense examination of Villas-Boas' suitability to fulfil longer-term ambitions. The hierarchy had sanctioned a huge spend over the summer on seven new players, including three club record fees, reinvesting the money raised by Gareth Bale's sale to Real Madrid and more.

Yet the new personnel, while enjoying fine reputations on paper, have taken time to adapt to the Premier League and the team's stodgy and conservative play has failed to enthuse those in the boardroom. They have scored only 15 goals in 16 league games, a reality that has overshadowed their serene progress in the Europa League which has led to a knockout tie with the former Spurs manager, Juande Ramos, who is now with the Ukrainian club Dnipro Dnipropetrovsk.

The Portuguese was contracted until the summer of 2015 and following his brief and unhappy tenure at Chelsea, which ended abruptly in March 2012, may now seek to re-establish his reputation abroad. "The club can announce that agreement has been reached with head coach, André Villas-Boas, for the termination of his services," read the club's statement. "The decision was by mutual consent and in the interests of all parties."