Venables was England's coach between 1994 and 1996
Newcastle's talks with Terry Venables over appointing the ex-England coach as their interim manager have hit an impasse, BBC Sport understands.
Newcastle want to appoint Venables on a match-by-match basis but the 65-year-old wants a longer-term offer.
Venables has been holding talks with director of football Dennis Wise and vice-president Tony Jimenez.
Newcastle had hoped to make an announcement before the weekend as the Magpies try to find some stability.
Newcastle's Carling Cup exit to Tottenham on Wednesday was their third straight loss since Kevin Keegan's resignation, with owner Mike Ashley wanting to sell following fan protests over Keegan's departure as manager on 4 September.
Venables, who is a close friend of Wise, has been out of work for nearly a year after he was sacked as assistant to former England coach Steve McClaren in November 2007.
In an interview with BBC Sport on 18 September, Venables said the so-called foreign model of a head coach and director of football could work but only if the roles are clearly defined.
He said: "It works if everyone's in agreement, if you're in agreement with the situation as a manager then fine. But if you say no and then it's implementing change that is when the problems come in.
"I think the parameters of a manager's job have got to be clearly defined."
Since Keegan left the club over a dispute regarding control of player transfers, Newcastle have been in free-fall.
And following protests by supporters, billionaire Ashley, who has pumped £250m into the club, decided to sell the troubled club.
Ashley has said he is unable to watch the Newcastle team due to fears over his family's safety.
"I'm now a dad who can't take his kids to a football game because I am advised that we would be assaulted," he said earlier this month.
Venables was England's coach between 1994 and 1996.
He made his name in management with spells at Crystal Palace and Queens Park Rangers before his exploits saw him appointed Barcelona coach.
He was dubbed El Tel and guided the club to a Spanish League title, a League Cup win and a European Cup final - which they lost on penalties to Steaua Bucharest - before being sacked in September 1987.
He took over at Tottenham later that year and won the FA Cup with the club in 1991 before taking a role upstairs as chief executive at White Hart Lane as Sir Alan Sugar took over the club.
But a deteriorating relationship between the two led to his acrimonious exit in November 1993, which saw matters end up in the High Court.
After a two-year spell as England coach which culminated in reaching the semi-finals of Euro 96, he had an unhappy spell as consultant and chairman of Portsmouth and failed in his attempts to lead Australia to qualification for the 1998 World Cup.
A foray back at Palace did not go well as the club found itself struggling for money and form.
Venables restored some of his ailing reputation when he was brought in as Bryan Robson's assistant at Middlesbrough and helped the club avoid relegation in 2000.
He did not stay at the Riverside long and went on to manage Leeds in July 2002 but left less than a year later as the club spiralled into financial crisis.
Hull City boss Phil Brown, who hails from the North East, told the BBC: "You can't get anyone with more experience than Terry.
"What Newcastle need is somebody of that ilk. Whether Terry Venables is the right man, is their (Newcastle's) decision."
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