It is not only players that Arsène Wenger develops. He also cultivates coaches. And, on Wednesday, his most prized protege could eliminate Real Madrid from the Champions League, as Claude Puel takes Lyon to the Bernabéu with a 1-0 first-leg lead.

Puel and Wenger have been close since 1988, when the former was a key player in Monaco's French title triumph, Wenger's first trophy as a manager. That they would share in success was not obvious at first: Puel was a ball-winning midfielder whose limited skill did not immediately endear him to Wenger, but, gradually, his experience and ferocious will to win did.

"I remember Claude saying, early in the season, 'you may not be picking me now, but I'm going to force you to put me in that team'," recalls Jean Petit, Wenger's former assistant at Monaco. Not only did Puel become a fixture in the side, he evolved into Wenger's proxy on the pitch, where he ensured constant compliance with the manager's instructions.

Recognising his qualities as a leader and teacher, Wenger encouraged Puel to combine his playing duties with coaching the club's youth players. He continued to do that even after Wenger left, in 1994. When he stopped playing, two years later, he graduated to reserve team manager, where his charges included Thierry Henry, who acclaims Puel as one of the most important influences on his career. Eventually, he acceded to the post for which he had always seemed destined and, in 2000, emulated his mentor by guiding Monaco to the title.

The following season, results dipped and Puel was unceremoniously sacked. During the ensuing year out of work – and at various other stages over the past decade – he was welcomed to Arsenal's training ground to pursue his education with Wenger.

In 2002, he was appointed manager of Lille and, much like David Moyes at Everton, turned a club with modest resources into regular botherers of the big boys. In 2008, he was headhunted by Lyon. At his unveiling, his new club's chairman, Jean-Michel Aulas, inevitably presented him as "a future Arsène Wenger". Until the first-leg win over Real, however, the accuracy of the description had begun to look doubtful.

Last season, Puel became the first Lyon manager since 2001 not to win the French title. For much of the campaign, it even looked like they would miss out on the Champions League places, which would have been catastrophic for a club that makes appearing in the continent's most lucrative competition one of the cornerstones of its budget.

They eventually crept into third place, but many fans still expected him to be dismissed last summer, given that his predecessor, Alain Perrin, had been ditched despite doing the League and Cup double.

Worse than the results, as far as many fans were concerned, was Puel's brand of football, which – despite all the comparison with Wenger – was considered boring. He inherited a team with an attacking tradition and immediately made it clear that his priority, as at Lille, was hard work and defensive discipline, an unpopular method made to look foolish by regular blunders by his defenders.

Lyon kept faith in their man and, though their wobbles continued domestically – due, partly, to multiple injuries – their performances in Europe have been sensational.

The 2-1 victory over Liverpool at Anfield in October came in the middle of a wretched run in the league, but the victory over Real seems to have triggered a revival on the home front. For that win, the intensive pressing that has always been a feature of Puel's team was allied to imaginative attacking and Lyon could have won by more than 1-0.

In their next league game, they tonked Sochaux 4-0 away, with Michel Bastos, the Brazilian winger – who has generally failed to fulfil expectations this season – hitting the first hat-trick of his career.

"The win over Real has set a benchmark for us," says Bastos. "It has probably kickstarted this team because we went to Sochaux and played exactly as we had done against Real, winning the ball aggressively and then being inventive with it. We have to confirm that we can do that on a regular basis, but we go to the Bernabeu with a lot of confidence."

Confidence is not exactly rampant in French football at the moment, what with the ever less-popular national team being booed off the pitch following Wednesday's 2-0 friendly defeat by Spain, and Paris Saint-Germain fans taking hooliganism to new levels by fighting among themselves during last week's 3-0 defeat by Marseille, leaving one supporter in a coma.

Debt is not as draining as it is on English clubs, thanks, in part, to the fact that all French clubs are given their stadiums for free by local governments – but most of them are still reliant on the generosity of sugar daddies rather than on sustainable policies.

The Champions League, though, is providing cheer because Lyon, if they beat Real Madrid, are likely to be joined in the next round by Bordeaux, meaning France would have two clubs in the quarter-finals for the first time since 2004.

That mainly reflects the virtues of those two clubs, both of whom are among the country's few exceptions in that they have produced fluent teams while operating within their natural means. But it is also evidence of a boon from which all of Ligue 1 has benefited; namely the declining purchasing power of English clubs.

The weakened pound and increased tax in Britain has enabled French clubs to compete on salaries, meaning players such as Bastos or goalkeeper Hugo Lloris at Lyon, or Bordeaux's Marouane Chamakh and Yoann Gourcuff – who would previously have been plundered by Premier League clubs – are choosing to stay longer in France.