Blues are still waiting to receive an official approach from Villa to speak to McLeish - before the battle to thrash out a compensation package can get under way in earnest. McLeish resigned as Blues boss on Sunday and the Scot has been the favourite with the bookmakers to replace Gerard Houllier as Villa. City will be seeking the full £5.4million due in compensation for the remaining two years of McLeish's contract at the time he quit. This figure will be reduced to £3million on July 1 but City will demand the amount that was due on the date McLeish ended his three-and-a-half-year reign. Birmingham acting chairman Pannu told Sky Sports: "The matter concerning Alex McLeish is with the Birmingham City lawyers. They are dealing with it. "I am here trying to protect the interests of the club and, in doing so, I'm adhering to the terms of the contract that was agreed between the manager, his legal advisors and the club. "I have nothing against Alex McLeish. If he moves to another place, he will go with my blessing. "But it will be done properly as per the contract." McLeish, who is currently on holiday in Corsica, is considering a case of constructive dismissal against Blues. His relationship with City owner Carson Yeung became increasingly strained last season. Such action by McLeish could take time, as was the case when Martin O'Neill left Villa last August as he did not settle the matter for nine months. But bringing such a case against Birmingham will not mean Villa can automatically escape paying compensation to their Midlands rivals for the remainder of McLeish's contract. Action taken by McLeish against Birmingham would run alongside any battle between the two clubs over the former Rangers manager. Certain sections of Villa fans continue to make it clear they do not want McLeish as manager. Jonathan Fear, editor of the Vital Villa fans website, said: "I would fear for the atmosphere and attendances at Villa Park if Alex McLeish is appointed manager. "I've got friends who are adamant they will return their season tickets if McLeish is appointed. "McLeish is a tough bloke but no matter how thick skinned you are, it will be a tough sell for him to win over the Villa fans." Villa are keen to make an appointment as soon as possible so McLeish - or any new manager - can be in place before the players report back for pre-season training on July 7.
