Michael O'Neill is set to continue as manager of Northern Ireland after turning down the Scotland job, Press Association Sport understands.

The 48-year-old was believed to be close to taking over as Scotland boss following talks last week with the Scottish Football Association.

"It's a huge honour to be offered the position, however, I do not feel that this is the right opportunity for me at this moment in my career," he is quoted as saying on the BBC website. 

The SFA had agreed to meet a £500,000 compensation payment to the Irish FA in order to secure the services of O'Neill, who had described talks between the parties as "productive".

However, after a period of deliberation, O'Neill, who lives in Edinburgh, has decided against taking the post to succeed Gordon Strachan, and will instead remain in charge of Northern Ireland following their failed World Cup qualification campaign.

The former Dundee United and Hibernian midfielder has two years left to run on his current deal with the IFA, but has already been offered an extended contract until 2020.