1:35 Sky Sports Scotland's Charles Paterson says the Steven Gerrard speculation affected Graeme Murty and explains how things changed after Rangers lost 3-2 to Celtic. Sky Sports Scotland's Charles Paterson says the Steven Gerrard speculation affected Graeme Murty and explains how things changed after Rangers lost 3-2 to Celtic.

Graeme Murty has been sacked as Rangers boss as the Scottish Premiership club continue discussions with Steven Gerrard.

Murty, 43, was on a short-term contract until the end of the season but has departed with three games of the campaign to go, which will be overseen by Jimmy Nicholl and Jonatan Johansson.

Sky Sports News understands that Murty told the players of the decision on Tuesday morning, after admitting that discussions with Gerrard had made things difficult for him personally.

Murty during the Premiership match at Celtic Park

Sky sources reported on Monday that the Liverpool youth coach and former England captain was in talks over a potential agreement that would land him a first senior managerial position since retiring from the game - and while some issues are still to be resolved, it is understood both parties remain keen to reach an agreement.

Following a 5-0 thrashing at the hands of rivals Celtic on Sunday, Murty failed to conduct any post-match media duties.

A statement from Rangers confirming his departure did, however, open the door for a return to his previous job in the club's academy.

"Graeme Murty has this morning been relieved of his duties as manager of Rangers," a club statement said. "Jimmy Nicholl and Jonatan Johansson will take charge of the team for the three remaining matches of the season.

Rangers lost 4-0 to Celtic in the Scottish Cup semi final

"Rangers are grateful to Graeme, who did not hesitate when asked last October to become interim manager after the departure of Pedro Caixinha and then, at the turn of the year, when he was offered the role as manager until the end of the season.

"Graeme has had to contend with difficult and challenging circumstances but conducted himself in a thoroughly professional manner. He will take some time to consider his options, which include returning to his role at the Rangers Academy.

"Jimmy Nicholl and Jonatan Johansson have already started preparing the team for the match against Kilmarnock on Saturday and they will be in place for the two remaining fixtures, against Aberdeen and Hibernian.

Jimmy Nicholl and Jonatan Johansson will take charge of Rangers' remaining fixtures this season

"The club hopes to be in a position to comment further on the managerial situation in the near future."

The former Scotland international took over as Rangers' development boss in 2016 after leaving his role as U18 coach at Norwich.

He was placed in caretaker charge of first-team duties in February 2017 after Mark Warburton and David Weir left the club and secured a 1-1 draw in the Old Firm derby in his final game in charge before Pedro Caixinha was appointed.

However, Murty was again asked to step into the Ibrox dugout on a temporary basis after the Portuguese was sacked in October last year.

He was given the job until the end of the season in December, with Rangers enjoying an upturn in form around the turn of the year.

However, a 3-2 loss to Celtic at Ibrox in March was followed by a defeat to Kilmarnock and a draw at Motherwell.

A heavy 4-0 loss to Celtic in the Scottish Cup semi-final was followed by Sunday's 5-0 humiliation at Parkhead which saw Rangers' Old Firm rivals win the Scottish Premiership.