Stuart Pearce will take charge of the England team for the friendly against Holland on 29 February, the Football Association chairman David Bernstein has confirmed.

Bernstein was speaking for the first time since Fabio Capello resigned as England's manager following the decision by the FA to strip John Terry of the captaincy due to his pending racism trial in July. Terry denies a charge of racially abusing the Queens Park Rangers defender Anton Ferdinand in October.

Bernstein, who thanked the FA board for their "unified view" during the process, told the press conference that Pearce will take temporary charge while a long-term replacement is sought, and explained how the resignation came about.

Bernstein said: "I would like to publicly thank Fabio Capello for all the work he has done. I want to emphasise that all the way through he has behaved with dignity and honour. I am able to say that yesterday, not an easy day, we concluded matters with a handshake. Any reports of 'storming out' are a complete misrepresentation of the facts.

"I have been in football 20 years. I have a good understanding of relationships with managers and agree the manager is the most important person. But there are moments when the board and chairman has to step up to the plate.

"We all believed the John Terry case would be dealt with in March or April. When it was postponed we were taken by surprise. The board made a very quick and unanimous decision regarding the captaincy. I informed Fabio on Thursday evening as soon as the decision had been made.

"Fabio wasn't happy but he accepted the board's authority in the matter. On Sunday Fabio then conducted an interview with an Italian broadcaster. That caused conjecture and huge public debate and frankly it was an unsatisfactory situation.

"[The FA general secretary] Alex Horne and I met with Fabio yesterday and had a meeting lasting just over an hour. It was a very detailed meeting with a lot of detailed questions asked by us. We then adjourned the meeting and I then engaged myself with Fabio in his office, and it was at that time that he offered his resignation and I, on behalf of the board, agreed that this was the right decision by the FA.

"I will emphasise that the meetings were professional and amicable. All matters were concluded within four hours.

"With regards to the future, I am very pleased to announce Stuart Pearce will manage England for the Holland match. He has huge experience outside and inside the organisation. He has been working with the Under-21 team and has been working with Fabio for some time. I have got great confidence in Stuart, we will be in good hands.

"I spoke to him a little earlier and, as you might expect from Stuart, his first thought was for his country and for managing his country without any conditions at all. He just said: 'If you would like me to do it, I want to do it'.

"Our priority then will be to appoint a new England manager. We will get the best person in place as soon as we possibly can."

Bernstein, who refused to discuss the Tottenham manager Harry Redknapp being made favourite to take on the role, said the new manager would preferably be "English or British", but another foreign manager was not ruled out.

"We will do this as quickly and sensibly as we can but don't want to rush the process. We want to to it properly, do it professionally. We will put a shortlist together of key people. We will do it as soon as we can. It will be a major priority for us."

Bernstein was confident England's preparations for this summer's European Championships in Poland and Ukraine remained on track.

"We are in very good shape in many ways," he said. "The organisational matters for the Euros are in place – our base camp, training camp and all else. There's plenty of time. The squad won't get together until May so there is time for a new man to get in place and do what he needs to do building up to the competition. I think we're actually in a much better place than we appear to be."

He also made clear that the prospect of sacking Capello "did not arise … We had a full and frank discussion with him and he came to the conclusion himself. Of course it's regrettable when a manager leaves like this. Fabio has had a great record, but it's happened now.

"Could it have been avoided? We had a very frank meeting with Fabio. It was very civilised and at the end of it he decided he felt he had to go. I can't really add to that."