After a summer of constant speculation about his future, Megson has put pen to paper on a deal which will keep him at the Hawthorns until at least 2005.

There were fears that Megson - currently in Devon on the club's pre-season tour - would decide to quit the Baggies after guiding them to promotion as a result of his much publicised disagreements with the then chairman Paul Thompson.

But new chairman Jeremy Peace quickly sought to dispel worries over that possibility and now Megson has committed himself to the club he has transformed from being strong candidates for the drop into Division Two in barely two seasons.

Batson, Albion's recently appointed managing director of football, told PA Sport: "The whole purpose of the exercise was to make sure the manager and the staff who did wonderfully well to gain promotion remained here.

"We are delighted that Gary Megson has signed a new contract. He worked very hard to get the team to perform at a very high level and we wanted that to continue for what is a big season ahead of us.

"It is good that this has been put to bed and there was a willingness on all sides to get things done and dusted.

"Obviously if you are successful in any sphere then you are going to be attractive to other employers and everyone is delighted Gary has committed his future to West Bromwich Albion.

"It gives the club stability. The manager is a figurehead and if his future is in doubt then it can have a knock-on effect and get to other things."

Former West Brom star Batson added: "You have to admire the achievements of Gary. It was difficult times when he first came to West Bromwich Albion.

"But he managed to stave off relegation, got them to the Division One play-offs the year after that and built on that.

"Sometimes no two seasons are the same but Gary kept things going in the right direction and the last season has been fantastic.

"His motivational skills are very good, he organises players very well and he gets them to play to their maximum. Him staying is brilliant for the club."

Meanwhile, Megson is backing the club's new performance-related bonus scheme which will see players rewarded for doing well without putting the club into financial jeopardy.

Albion are keen to avoid the kind of scenario where clubs have suffered financial hardship through paying out huge Premiership wages and then being relegated.

Megson said: "There is a large amount of money waiting for them if the team is successful. But I have stated to the players that no-one will get very, very rich at the expense of West Bromwich Albion.

"I have looked from afar at some players getting large amounts of money only for their clubs to get relegated. These players then moved on and had a go somewhere else.

"If the club does well, then players as individuals will do well. If the club don't do well, they won't either."