Portugal coach Luiz Felipe Scolari has signed a new deal that will see him stay on as national coach until 2008.

The Brazilian-born manager led Portugal to fourth place in the World Cup finals in Germany, their best showing for 40 years, beating England en route.

And despite speculation linking him with a second spell as Brazil coach, he has signed a new two-year deal.

It means Scolari, who turned down the England job in April, will be in charge at the 2008 European Championships.

The 57-year-old's previous contract with Portugal was due to run out on 31 July.

And, according to a spokesman for the Brazilian Football Confederation, he was offered the chance to take over Brazil again, having led them to World Cup glory in 2002.

However, he opted instead to stay in Europe with his family, having lived there since taking over Portugal in December, 2002.