Scotland were looking for a new manager - their third of the year - tonight after Alex McLeish resigned within hours of returning from the World Cup draw. Scottish Football Association chief executive Gordon Smith admitted it was ``a big loss'' as he began looking at candidates for the post, who could include Gary McAllister, Billy Davies and Craig Levein. McLeish quit after seven wins in 10 matches made him an attractive commodity for Barclays Premier League clubs and he is set to be unveiled as Birmingham's new boss tomorrow morning. The circumstances behind his departure were dramatic. Within minutes of the SFA board revealing they would hold a board meeting at 11.00am tomorrow to discuss McLeish's future, notice came from Birmingham that a 10.30am press conference had been called. The SFA had been caught out by the announcement, as although they were aware of interest in McLeish, having turned down an official approach yesterday, they had anticipated having more time to persuade the 48-year-old he should stay on with the national team. Asked what McLeish had told him about the decision, SFA chief executive Gordon Smith told PA Sport: ``He's not said anything, he's sent a written resignation. ``We are very disappointed to lose Alex as our manager.'' Smith had spent recent days in Durban, South Africa, talking to McLeish about not only staying on, but extending his contract which was due to expire after the 2010 World Cup. ``We were sitting down at this stage and had broached increasing his deal time-wise and financial-wise,'' Smith confirmed. ``He has been a terrific manager for Scotland and a great asset to the association. ``He's also been working in other aspects within the SFA, and he's a big loss.'' Scotland's future without McLeish will rise to the top of tomorrow's agenda, and Smith is hopeful of installing a new manager before long. It was not on his watch that Scotland lost Walter Smith to Rangers in January. David Taylor, who has since moved on to UEFA, was the SFA chief executive at the time of Smith's move to Ibrox. Now SFA chief Smith faces the task of finding the right man for the job, and Davies was quick to throw his hat into the ring tonight. No doubt the former Derby and Motherwell manager's name will come up again when Smith and the SFA board hold talks. But Smith admitted: ``The meeting tomorrow has probably lost a bit of its impact. ``I didn't think we'd be dealing with this today. ``It's one of those things. It's market forces these days, and the Premier League is where lots of guys want to be.'' McLeish will do well financially from moving south of the border but the professional challenge is what appears to have lured him. Birmingham travel to Tottenham on Sunday, then go to Newcastle in their following match. In January, Blues have games against Manchester United, Arsenal and Chelsea, and an FA Cup third-round tie to look forward to. He has longed for the opportunity to manage in England and has now made it happen, but those he leaves behind at Hampden were upset by his exit so soon after Scotland's Euro 2008 hopes were shattered by Italy. SFA president George Peat said: ``I am disappointed that Alex has chosen this course of action. ``He is an outstanding manager who has done a fantastic job with the national team. ``Everyone at the SFA and indeed Scotland fans around the world were looking forward to Alex leading us into the World Cup qualification campaign. ``This is why we chose to offer Alex an extended contract while we were in South Africa. ``Sadly, he has chosen not to take up this offer.'' McLeish had carefully managed the speculation which began almost immediately after Scotland's defeat to the Italians. He insisted in Durban that it was ``absolutely crazy'' for people to be backing him as the next Birmingham boss at such an early stage, but the money now looks to have been shrewdly placed. Smith admitted the SFA were effectively rendered powerless as they fought to keep McLeish. He told Sky Sports News: ``We'd like to tie these people up but even a contract doesn't matter that much when a really attractive club comes in. ``There's no major game until next year but I would like to get someone in place before that. ``There will be names mentioned along the way and we'll have a look at the names in the coming days and make a decision after that.'' Smith accepted that Scotland's seven wins in 10 games under McLeish had come at a price. The SFA chief told Sky Sports News: ``Alex was doing a very good job and when a job became available there was speculation that he would be interested. It was a mixture of those things. ``What happened was we got an offer from Birmingham to speak to Alex and we rejected that. ``There was then a discussion on the matter and this is what has happened today. What has happened was a surprising thing as it moved on to another level.'' Birmingham received £3million from Wigan for the Latics taking manager Steve Bruce. Smith said: ``We'll take that £3million! That would be very fair. ``There will be compensation and I think it would be substantial.''