Former Manchester City and England defender Danny Mills has told talkSPORT Manuel Pellegrini is being undermined by speculation that Pep Guardiola will replace him as manager in the summer.

The Blues have long been linked with the former Barcelona boss, and they are now favourites to land the Spaniard after Bayern Munich confirmed he will leave his post at the end of the season.

Pellegrini has never seemed to have the full backing of club and fans during his tenure, with the Chilean facing criticism for City’s failures in Europe, and reports claim the club are now ready to wield the axe and appoint in-demand Guardiola before it’s too late,

But with Pellegrini’s contract not set to expire until June 2017, there is widespread confusion over the current situation.

And Mills believes the club have the responsibility to let supporters, and most of all the manager, know of their long-term plan, warning that their form may suffer if they don’t.

Reacting to Monday night’s 2-1 defeat to Premier League title rivals Arsenal, he told the Alan Brazil Sports Breakfast: “The Pep situation is an interesting one.

“I almost think the club have to come out and make some sort of statement or at least tell Pellegrini the situation.

“Speculation was rife at the start of the season and Pellegrini has always been under pressure, and now we know that Pep is definitely available.

“The rumours are that, with the ex-Barcelona guys at Manchester City, that he will be coming in at the end of the season, but they are only rumours at the moment.

“Manuel Pellegrini must feel a little undermined. The players will be thinking that the manager might not be with them for much longer, and sometimes that can just drop five per cent off your performance.

“That’s not what City need at the moment.”