Rangers' bid to instal Walter Smith as their new manager was continuing to be thwarted this morning. The Scottish Football Association refused Rangers permission to approach Smith yesterday, and their position was reiterated as they fought to keep the national team boss.

Smith asked to be released from his contract with the SFA yesterday and was predictably rebuffed.

His request, which came at a meeting prompted by Rangers making contact with the SFA, served to confirm Smith's interest in a return to Ibrox. However, the SFA insisted they would not countenance losing Smith at a crucial stage of their Euro 2008 qualifying campaign.

That remained the case today, with an SFA spokesperson reporting there was "no change" in the situation.

Within minutes of Paul Le Guen resigning as Light Blues boss last week, Smith emerged as favourite for the job. Almost nine years have passed since Smith left the club to join Everton — and with the team's fortunes in a state of turmoil, he is seen as the man to bring back silverware to Ibrox.

After a difficult spell with Everton, he has fully restored and arguably enhanced his reputation with Scotland.

It is understood that the SFA's reaction to Rangers' bid for Smith was not unexpected by the Govan club, whose disastrous season took a further turn for the worse when they were knocked out of the Tennent's Scottish Cup by Dunfermline on Sunday.

Rangers will have to wait to see if Smith resigns, a move which would leave the Light Blues open to a compensation claim by the SFA.