Manchester United midfielder Paul Scholes is set to sign a new one-year contract at Old Trafford, reports the Times.

Sir Alex Ferguson is keen to extend the 37-year-old's current deal beyond this summer, and will offer him the chance to continue his playing career next season.

Since coming out of retirement, Scholes has been instrumental in helping United overhaul Manchester City at the top of the Premier League table.

The league leaders have won 11 of the 14 games Scholes has played and opened up an eight-point lead over their local rivals.

He inspired Ferguson's side to a 2-0 victory against QPR on Sunday, and scored his third goal of the season with a typical long-range effort in the second half.

Scholes will, however, reject the opportunity to come out of international retirement and play for England at this summer's European Championships.

Harry Redknapp, who is favourite to lead the Three Lions in Ukranie and Poland, had said he would consider picking the 10-time Premier League winner if he is appointed.

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