Nottingham Forest have terminated the contract of manager Billy Davies with immediate effect.

The former Preston and Derby manager was unable to secure promotion to the Premier League in last season's npower Championship play-offs, falling to a 3-1 aggregate defeat to eventual winners Swansea.

The club have also confirmed on their official website that they are talking to former England boss Steve McClaren about the vacancy.

The Scot joined Forest on January 1 2009, just over a year after his dismissal by Derby.

Davies spent £4million on new players at the City Ground during his first summer in charge and led the club to an unbeaten run of 18 league games which contributed to a play-off place at the end of the 2009-10 season.

The Reds were beaten 6-4 on aggregate by Blackpool who would then clinch promotion to the top flight with victory over Cardiff at Wembley.

The board entrusted Davies with a second full campaign in which the side finished sixth after a season of highs and lows, but the eventual disappointment of an second consecutive exit at the play-off semi-final stage proved to be the last straw.

McClaren has most recently been linked with the vacant Aston Villa job but could be set to renew his management career in England in the Championship after mixed success in with FC Twente and Wolfsburg.