Walter Smith considered quitting Everton only five months into the job after not being told about Duncan Ferguson's transfer to Newcastle.

The Scottish striker has passed a medical on Tyneside and will seal his £7 million move when he is unveiled at a press conference at St James' Park today.

But Goodison boss Smith has admitted that he was left reeling by the news that his most-prized asset was going to be sold in the wake of Monday night's 1-0 win over the Magpies on Merseyside.

Smith actually appeared on television to deny rumours that Ferguson could be joining Newcastle's North-East rivals Sunderland, but, an hour later, was informed that the player was being sold.

"I am disappointed at Duncan leaving and I am also disappointed with the circumstances in which the transfer has taken place," he said.

"I was unaware that the transfer was going through until 11 p.m. last night after our game with Newcastle so it was disappointing to me in both aspects."

Smith made his displeasure about the sale of Ferguson known to the Everton hierarchy at a board meeting yesterday morning.

"After finding out about it all last night, I had to sit down and take stock," he added.

"The easiest thing would have been to make a knee-jerk reaction but we have spent a fair amount of money this season and I felt for myself that it was the right thing to stay to try and work our way round the problem that we have at the moment instead of walking away.

"So there was a board meeting this morning - which was a scheduled board meeting, not one that was specially called - and during that there was a lot of things cleared up."

He told Clubcall: "I'm happy to stay as Everton manager."

Everton's decision to sell Ferguson without consulting their manager comes in the same week that West Ham boss Harry Redknapp was left fuming by the money men deciding to let Andy Impey join Leicester without his agreement.

Goodison chairman Peter Johnson also faces the wrath of fans angry that their star player had been sold while Smith, only appointed in July, was kept in the dark.

The bitterness from supporters will only grow with the realisation that the money for Ferguson will be used to cut Everton's massive overdraft, believed now to be approaching £10 million.

Ferguson's former club Rangers are also reported to be due 20% of any sell-on fee which reduces even further the cash going into the Goodison coffers.

The fee paid by Newcastle for the 26-year-old striker is an initial £7 million and another £1 million after 35 games.

But with Rangers getting £1.6 million of that, Everton will have only £6.4 million to satisfy their bankers with.

Tony Tighe, spokesman for the Everton Shareholders' Association, confirmed that the fans are sorry to see their cult hero leave.

But he added: "I think the manner in which he has departed is more of a concern.

"Unfortunately, we have not had any communication from the chairman or the board - again we seem to gave lost control in terms of communication - but from what I gather the manager knew nothing about the sale."