Will Capello stay and face fans' anger, or quit and take £10m payout?

When England's players convened in the dressing rooms at half-time yesterday, Fabio Capello said nothing to them. Perhaps even then, with his side 2-1 down, the England manager knew the writing was on the wall for his team and was considering his future.

Capello will talk this afternoon in the traditional England manager's World Cup post-mortem, and by then the Football Association hopes to have some clarification on his future. Those around the Italian say that he wants to see out his contract to the end of Euro 2012, but that the moment he feels he does not have the backing of the FA he will want to go – although he will not go cheaply.

In his post-match press conference yesterday, Capello could not explain why he wanted a meeting with Sir Dave Richards, the newly appointed chairman of Club England, for assurances on his future. Why did he want a meeting? "I want to speak with the chairman to decide my future." What is to be decided? "Whether he has confidence in me or not." Why wouldn't he have confidence in you? "We have to wait. Sorry. No more."

It was hardly the cast-iron assurance that he wants to stay in the job. He will be owed around £10m in compensation if he is sacked. The FA knows that it is in for heavy criticism if it pays that, having deleted the get-out clause in his contract just the day that England left for South Africa.

This has all the makings of a nasty stand-off between the FA and Capello if the governing body decides that he has to go. Adrian Bevington, the managing director of Club England, said last night that "nothing has changed in my mind from before the game" – but as a long-serving FA man, Bevington knows that there will be many competing voices at the organisation on whether Capello should stay or go.

The newly formed Club England board was fast-tracked into existence last month, essentially to keep Capello happy in the aftermath of Lord Triesman's resignation. Richards, Bevington, Sir Trevor Brooking and the FA general secretary, Alex Horne, are on the board, but a decision as big as sacking the England manager will also have involvement from the main FA board.

The FA needs to ask itself some hard questions about whether it is to react to this disappointment by jettisoning yet another manager. There will be many who feel that Capello, with his £4.8m basic salary, should be thrown overboard for overseeing such a humiliation. And the question those people will need to answer is: if not Capello, then who?

The English options are Roy Hodgson and Harry Redknapp. Hodgson has had two excellent seasons with Fulham and, given the anti-foreign coach sentiment that is likely to sweep in after yesterday's defeat, would be the first choice with the FA.

Redknapp's forthcoming tax evasion case with the Inland Revenue would probably make him too controversial for the FA.

As for Capello, he is 64 and is unlikely to want to work for much more than another four years. He says that he loves living in London but will he still love it when every other cab driver and white-van man wants to remind him of their opinions on England's failure this summer? Capello has a two-year qualification campaign for Euro 2012 before he can have another crack at tournament football.

The core of his squad is getting old and, even if they are good for another campaign, he has no guarantee that they will not crack up again in Poland and Ukraine. He also knows that if he gets two bad results in qualification he will immediately be under pressure. When he considers the next friendly at Wembley against Hungary on 11 August he will probably be filled with dread. That might make his mind up for him.

How England's high hopes came crashing down

John Terry/Wayne Bridge scandal

The revelation of John Terry's affair with Vanessa Perroncel, ex-fiancee of former team-mate Wayne Bridge, disturbed the harmony amongst the England squad. Capello acted quickly, stripping Terry of the captaincy. Wayne Bridge retired, leaving Capello without a proven understudy to Ashley Cole, and the saga changed the atmosphere within the squad.

Rooney's fitness issue

Wayne Rooney injured his right ankle Manchester United's away game against Bayern Munich on 30 March. He did not play again until 7 April for United. Rooney has not scored since then for United or England. The form he showed in the season just never returned.

The Capello Index

The day before Fabio Capello's preliminary 30-man squad was announced the launched the Capello Index, in which he proposed to rate his own players' performance during the World Cup. The reaction to it forced the Football Association to tell Capello to can the project. He could not see what was wrong with it.

Rio Ferdinand's injury

Rio Ferdinand had played just 21 games for United last season but believed his back problems were solved before he went to South Africa. On the first day of training at the World Cup he was tackled by Emile Heskey, injuring his knee ligaments and leading to his replacement in the squad by Michael Dawson. Steven Gerrard became the third England skipper since the turn of the year.

John Terry's team meeting

The former captain and Capello have not seen eye-to-eye recently. Terry hinted as much when he promised to take on Capello in the team meeting last Sunday. He was headed off by Capello's assistants but the tone of discord lingered on.

Goalkeeper situation

Capello kept to his habit of making his goalkeepers wait until two hours before the first game against the United States before announcing who would play. He struck with Robert Green and the West Ham man threw in Clint Dempsey's shot for the US equaliser. Capello changed to David James for the final three games but the damage was done.