The French champions were prepared to meet a £10 million buyout clause in the Spurs boss’s contract and drastically improve his salary but the Portuguese has rejected them.

Andre Villas-Boas has rejected a lucrative approach from Paris Saint-Germain to stay at Tottenham.

Seeking a replacement for the Real Madrid-bound Carlo Ancelotti, the French champions were prepared to meet a €11.7 million buyout clause in the Portuguese’s contract at White Hart Lane and substantially improve his personal terms.

Joining PSG after a single season at Spurs in which he almost returned the London club to the Champions League would have offered Villas-Boas a shortcut back into Europe’s premier club competition and allowed him to work with one of the continent’s most expensively assembled squads. Adding to the attraction of the PSG job was the 35-year-old’s strong personal relationship with president Nasser Al Khelaifi and his agent’s affinity with Leonardo, their director of football.

Instead, Villas-Boas has elected to stay at Tottenham; partly in anticipation of facing his former mentor, Jose Mourinho, in league football for the first time, partly in expectation of more aggressive transfer market backing from Tottenham this summer. “Andre is staying put at Tottenham,” a close friend said on Tuesday. “He is looking forward to the challenge of the ‘Happy One’.”

The decision was not a straightforward one for Villas-Boas. According to multiple sources, the Portuguese was discomfited by aspects of an impressive campaign at Tottenham in which he guided the club to its highest Premier League points total only to miss out on a Champions League qualifying slot on the season’s final day.

He was particularly frustrated by the club’s failure to complete deals for his principal targets in both the summer and winter transfer windows – Joao Moutinho and Leandro Damiao.

Though his appointment has still to be formally announced, Tottenham are to make Franco Baldini their new technical director this close season after pursuing the well-regarded Italian for over year. Baldini’s arrival at White Hart Lane, coupled with his friend Villas-Boas’ decision to turn down PSG, is expected to be rewarded with support in this summer’s market.

The coach has been working to keep Gareth Bale at Tottenham, despite Real Madrid having talked about investing as much as €100m in the forward’s transfer fee, while he also wants his squad improved in defence, midfield and attack to help drive the club into the Premier League’s top four.

“Turning down Paris should see the club recognise that it has to back Villas-Boas and Baldini in the transfer market,” said a source. “It is also a sign for trigger-happy clubs that coaches sometimes stay loyal even when offered huge salary increases.”

PSG are not the only club to show an interest in Villas-Boas this year. Napoli approached him before appointing Rafa Benitez but were frightened off by the €11.7m release clause. He was a back-up option at Madrid if Ancelotti could not be extracted from PSG and is being monitored by Barcelona as a long-term candidate to coach at Camp Nou.

According to Goal