Coach Luiz Felipe Scolari has verbally agreed a new two-year contract extension to keep him charge of Portugal until the European Championships in 2008.

The 57-year-old Brazilian, who nearly became the next England manager, is waiting to see how his team fare this summer before finally committing himself to two more years.

Portuguese football federation chief Gilberto Madail said: "We have agreed in principle, but I can't reveal the details at the moment.

"If Scolari extends his contract, it will be for two years, not four, and will run until Euro 2008."

Scolari took charge of Portugal after guiding Brazil to World Cup glory four years ago in Japan and South Korea.