Paulo Sergio has quit his post as Heart of Midlothian manager after rejecting a pay cut.
Owner Vladimir Romanov was hoping to retain the Portuguese but wanted him to stay with a salary decrease despite leading the Edinburgh club to the Scottish Cup last season.
But Sergio last night quit the club after negotiations completely broke down, turning down a reduced basic salary with performance bonuses to stay on next season.
"It was simple in the end. They had an option to extend my contract and I was waiting all this time.
"But it became clear that because of financial cuts they would not take up the option on the same terms as I was on.
"They couldn't honour what we had agreed in my initial contract. I have to understand that because it's not me who knows what the club can afford or not.
"But I couldn't accept the proposal they made because it's so inferior to my wage last season.
"I'm very sad because of the season we had, with all the difficulties.
"I was coming to a new country, a new club but after a season in charge we know all the opponents' strengths and weaknesses and we know our own players.
"I thought we might have done even better next season - everything was in place for that.
"I wish everyone at Tynecastle all the best. I am a great supporter of Hearts now. It's my decision because they made me an offer but it wasn't acceptable."
It is believed that former Jambos midfielders Paul Hartley and Colin Cameron (managers of Alloa Athletic and Cowdenbeath respectively) and ex-Tynecastle caretaker and current Raith Rovers manager John McGlynn are all in the frame to replace Sergio.
"That is me finished with Hearts so it is a very sad day," he told Record Sport.
