Manchester United have made a breakthrough in contract talks with José Mourinho, with each party confident an agreement can soon be reached.

Discussions have been taking place for some time and are now progressing well between the manager and the executive vice-chairman, Ed Woodward.

As the Guardian reported in October the Portuguese will agreet to extend his stay if United offer him terms that he believes reflect the progress of the side under him.

Last year, his first in charge, Mourinho claimed two major trophies – the League Cup and Europa League, the latter securing a return to Champions League football after a season out of the competition. While United finished only sixth in the Premier League, they are second at present, and if they remain there at the end of the season it would be their highest finish since Sir Alex Ferguson claimed a 20th title in May 2013, in the Scot’s final season before retirement.

Mourinho is thought to earn around £15m a year plus bonuses. These terms end in the summer of 2019 and he is demanding a marked increase in his package. His level of commitment to staying on at Old Trafford has been a matter of speculation yet it is understood Mourinho is happy at the club and views his long-term future as being at United.

When questioned about this last month, he said: “I am going to leave when the club wants me to leave because I have no intention to leave at all. My intention is to stay and to work and to improve and to bring the club to where the club belongs.”

Winning United’s 21st championship remains Mourinho’s chief ambition and as his side trail Manchester City by 12 points after 23 games he is conscious that the club’s wait for another title is set to reach half a decade at the end of the campaign. But he believes United will be much better equipped to challenge seriously again next season.