National team still without coach with 2010 World Cup qualifiers underway.
Iran on Tuesday said they were looking for a homegrown coach after Javier Clemente rejected an offer to train the national football team after a row over his insistence on living at home in Spain rather than in the Islamic republic.
The announcement ends a weeks-long, often contradictory, saga over whether Clemente would agree terms and means one of Asia's heavyweight teams is still without a coach with the 2010 World Cup qualifiers underway.
Ali Kafashian, the head of Iran's football federation, said Clemente had refused to sign an addendum to his contract committing him to only leaving Iran twice a year.
"Clemente said in a letter to the Iranian embassy in Spain that he is not ready to have a new addition to his contract as Iranian national team coach," Kafashian told the ISNA news agency.
"We are going to study other options for the coach," he added.
Iran's sports press had bitterly mocked Clemente for his insistence on doing much of his training work by watching videos at his luxury villa in northern Spain and only visiting the Islamic republic for games.
Other top coaches - such as England's Peter Reid and Germany's Winfried Schaefer -- had been mentioned as possible candidates in the last months but it appears the Clemente fiasco has convinced the Iranians to look closer to home.
"The chance of having an Iranian coach is greater than a foreign one," Kafashian told the state-run IRNA agency.
"The foreign ones are demanding a lot of money which the federation cannot provide. Also they are not familiar with Iranian football," he added.
Kafashian did not give any details on possible Iranian candidates but two names are likely to be in the minds of sports fans in the football-mad country to resurrect the fortunes of the embattled team.
The first is Afshin Qotbi, an Iranian-American who returned to his native country last year to coach top Tehran side Persepolis, who are currently the runaway leaders of the Iranian league.
Qotbi has strong coaching credentials and was technical assistant to South Korea under Dutch wizard Guus Hiddink.
The other possible candidate is Ali Daei, the most famous Iranian footballer ever, who also holds the record as the top goal-scorer in international football.
A relative novice to coaching, who played for Bayern Munich and Hertha Berlin, Daei retired from football last year and is now the coach of big Tehran team Saipa.
Despite boasting stars like Bolton Wanderers midfielder Andranik Teymourian and Eintracht Frankfurt winger Mehdi Mahdavikia, the national side has underperformed after being dumped out of the 2006 World Cup in the first round.
The Team Melli suffered a major embarrassment earlier this month when it could only draw with minnows Syria in its first World Cup qualifier.
Clemente coached the Spanish national side in two World Cups but was available for the Iran job after Serbia sacked him for failing to lead the team to the Euro 2008 finals.