Chelsea slash academy deals but deny Wilkins was victim of cost-cutting

Chelsea are taking a hard line over contract negotiations with a number of their academy stars including Gaël Kakuta and Fabio Borini who are still waiting to learn what kind of terms they will be offered when their existing professional deals expire at the end of the season.

The move marks a departure from the days when the club offered lucrative deals to those players that their scouts had identified as among the best in the world. Chelsea have denied that cost-cutting is behind their move to sack the assistant manager Ray Wilkins this week but there has been a notably stricter attitude to young players from the academy.

The emerging young star Jacob Mellis, 19, signed from Sheffield United's academy in 2007, has a contract that expires at the end of the season and he has been told that he will be offered only a one-year deal. The same goes for Borini, 19, an Italy Under-21 striker signed from Bologna, who has made eight first-team appearances and has so far refused to sign a one-year contract.

The biggest prize in Chelsea's academy is Kakuta, the France Under-17 forward who was at the centre of a Fifa charge for the Premier League champions last year, of which they were subsequently cleared by the governing body. The 19-year-old, regarded as one of the best in his age-group in the world, has still not signed a new deal at the club, raising fears that they could lose him on a free transfer at the end of the season.

Chelsea would be entitled to compensation for the player whom they signed from Lens in acrimonious circumstances in 2007. Given that Kakuta has spent three years at the club, Chelsea could expect a payment of close to £1m for his development although that would still represent a bargain for a player who was one of the most sought-after in Europe several years ago.

A lot of the players coming towards the end of their contracts were among those scouted by sporting director Frank Arnesen and his staff when owner Roman Abramovich's spending was at its height. The players were persuaded to join Chelsea by the offer of professional contracts as soon as they turned 17. Those deals are now coming to an end and the club are cagier about handing out more long-term contracts.

The club have given Dutch defender Jeffrey Bruma, 19 today and signed from Feyenoord in 2007, a new four-year deal. Patrick van Aanholt, another academy player to have made his first-team debut, has two years left on his existing deal. The club are not expected to quibble over a new long-term contract for 17-year-old Josh McEachran who has made significant progress in the first team this season.

Carlo Ancelotti had to endure an uncomfortable press conference yesterday in which he conceded that there was little he could do to save Wilkins' job once the decision had been made by the club to sack him as assistant manager. Wilkins is understood to be deeply upset at losing his position at the club.

Chelsea are expected to appoint a new assistant manager from within, with reserve-team coach Steve Holland and highly regarded youth team manager Dermot Drummy among the favourites to get the job. Drummy, formerly at Arsenal, has only been in charge of the club's youth players since January, but under his command the team won the club's first FA Youth Cup since 1961 in May.

Ancelotti said that he had been in a similar situation at Milan when a change of assistant was decided by the club. "I changed my assistant when I was in Milan," he said. "I started with one assistant [Giorgio Ciaschini] who is now working for Chelsea as a scout. We changed because the club made a decision to change and put an ex-Milan player [Mauro Tassotti] in to work with me.

"One thing is a job. One thing is a personal relationship. I have a fantastic relationship with him [Wilkins] and I'll maintain that. I don't have a problem. He doesn't have a problem. The club has made a decision. Ray respects that decision."

Wilkins will be entitled to a compensation payment under the terms of his contract.

What Carlo said about Ray (in his autobiography)

'One of the reasons I fit into the locker room was thanks to the fundamental role played by Ray Wilkins, my No 2 and my friend. It's one thing to translate words – plenty of people can do that – but translating feelings is the gift of only a select few. Ray is one of those select few, always present, noble in spirit, a real blue-blood, Chelsea flows in his veins. His heart beats in two languages, and that helped me. Without him, we couldn't have won a thing, and in particular we would not have started the year at supersonic speed.'