CRAIG Levein has followed up on his threat to take legal action against the Scottish Football Association over the terms of his £700,000 pay-off.

Stewart Regan, the SFA chief executive, revealed in Luxembourg last night that the governing body had now received a letter from the former manager's legal representatives. The SFA have agreed to pay Levein the £700,000 he is due for the remaining 20 months of his deal, but will do so in monthly instalments of £35,000 rather than a single lump sum. His SFA contract has not been terminated, which is understood to mean the monthly payments would immediately stop if Levein signed another contract to become a manager anywhere else before the summer of 2014.

Regan said that he was disappointed with the way in which the situation had developed but hoped his good relationship with Levein could survive the inevitable strain of the legal action. "As far as the SFA are concerned Craig is entitled to take whatever action he feels appropriate," said Regan. "I confirmed our position: that we had not terminated his contract and had agreed to honour the terms outstanding in what is a legally binding contract. But he has chosen to go down a legal route. We have now had a letter setting out how he intends to manage the process. We have handed that to our legal advisors and as far as the process is concerned now it is with lawyers.

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"Craig feels that, as far as the process is concerned, he doesn't feel able to carry on with the contract in place. He feels that he wants to leave and pursue legal action as opposed to just being paid on a monthly basis. As far as we are concerned that's now the position we are in. We have said that the contract has not been terminated and we will continue to honour the contract that remains.

"I am disappointed with the process I suppose. Craig went through a number of years operating as Scotland coach. I had a great relationship with him; he was an ultimate professional in terms of how he had gone about preparing and managing the development of the squad. He brought in some great players, but unfortunately he didn't get the results. So I am disappointed we find ourselves in this position.

"I've got what I believe to be a good relationship with Craig and I guess as chief executive it's always a tough task when you have to have a conversation with somebody regarding the board's decision. But I would hope we can actually maintain that relationship. Business is business. A relationship is a relationship. I'm hopeful we can restore that relationship because I have a huge amount of time for Craig as a person and a developer of players."

Regan claimed that there had been "substantial" expressions of interest in the Scotland job, for which Gordon Strachan and Joe Jordan have led the bookmakers' odds. He will discuss the vacancy with SFA president Campbell Ogilvie and vice-presidents Alan McRae and Rod Petrie during the trip to Luxembourg for tonight's friendly. Those four, plus Tom Johnston from the Scottish Junior FA, SPL chairman Ralph Topping and independent non-executive director Barrie Jackson, will decide who replaces Levein.

"There's been a substantial interest," said Regan. "People you would know, people of substance. A lot of people have put their names in the frame via the press but there have been others as well, both from home and overseas."