Rafa Benitez would prefer to stay on as Newcastle United manager, despite the fact West Ham are poised to make an official approach to the man they want to take charge of the team next season.

West Ham released a statement on Thursday evening in which they assured supporters they are close to appointing a manager with a proven track record in Europe and the Premier League.

Benitez fits into that category, as does the former Manchester City manager, Manuel Pellegrini, who is currently head coach of Chinese Super League team Hebei China Fortune. Pellegrini is also on West Ham’s shortlist, but the focus has centred on Benitez in recent days.

Newcastle responded a few hours later with a statement to Sky Sports News in which they said they were "confident Rafa Benitez will stay at the club."

“I would like to reassure our supporters that we have left no stone unturned in selecting the individual we believe is the right man to take West Ham United forward,” said West Ham’s joint chairman David Sullivan.

Benitez is desperate to find out what funds he will have at Newcastle credit: AFP

“We have followed a process that is progressing entirely to plan and are now very close to reaching an agreement.

“This is an exciting time for our football club. We are preparing to appoint a manager who has a proven record of success at the highest level of the game.”

The statement heightened fears on Tyneside that Benitez is set to leave, although sources close to him were adamant on Thursday night that they have not reached an agreement with anyone at West Ham and instead indicated that the Spaniard remains keen to confirm the size of his transfer budget with Magpies owner Mike Ashley.

West Ham’s bullish running commentary on their search for a replacement for David Moyes cast doubt on those claims, particularly as Benitez has not confirmed he wants to stay publicly and is known to be unhappy with the lack of clarity at Newcastle.

Despite his desire to remain in the North East, Benitez will not rule out leaving Newcastle as he is still waiting to hear a positive response from Ashley to his demands, despite weeks of talks with chief executive Lee Charnley.

Although Ashley released a statement on the club’s official website on Sunday in which he expressed his desire for Benitez to stay on, promising to give him every penny the club generates in the Premier League, Telegraph Sport understands the Spaniard has still not been told exactly how much money he will have to spend in this window. That has infuriated and exasperated him.

The ball park figure for the transfer budget is believed to be around £50m, with extra funds generated through player sales.

Part of the problem, though, is that Newcastle will not receive their next chunk of television money until mid-July. That will leave only two weeks of the transfer window to spend that money, which means there is a cash flow problem at St James’ Park in terms of giving Benitez funds to spend at the start of the window.

West Ham are looking for their next manager after David Moyes' departure credit: Reuters

Ashley will not put anymore of his own money in, which is believed to be the main cause of the log jam in talks. However, if players are sold, that will allow more flexibility, with more funds to come later in the recruitment process.

Despite the slow and frustrating progress in negotiations, club sources told Telegraph Sport that there is still a desire on both sides to reach an agreement and talks with Benitez representatives are ongoing.

As things stand, Newcastle have not had any contact with West Ham asking for permission to speak to Benitez, who has a year left on his contract. Any club who wants to employ Benitez, will have to pay £6m in compensation to the Magpies.

Although he is supposedly resisting the temptation to leave, Benitez would be intrigued by the West Ham job if he cannot reach a satisfactory agreement with Newcastle.

It is also understood that other clubs, both at home and abroad, have expressed an interest in his services, but nobody has made an official approach yet.

Meanwhile, another manager linked with West Ham, Paulo Fonseca, has signed a new two-year contract at Shakhtar Donetsk.