• Chelsea hunt hindered by Arnesen’s departure
• Third season of Abramovich era without a trophy

Carlo Ancelotti will see out the remainder of the season as Chelsea’s manager but is expected to leave in the summer as the club come to terms with what will be only the third season of the Roman Abramovich era to fail to yield a trophy.

Elimination from the Champions League on Tuesday by Manchester United, whom Chelsea trail by 11 points in the Premier League, prompted Ancelotti to admit that it was “not my decision” as to whether he would see out the remaining year on his contract. The Italian knows he will be compensated for that period if he is sacked and has yet to speak directly with Abramovich about his future. The club’s chief executive, Ron Gourlay, has indicated that an assessment will be made only next month.

Abramovich visited the dressing room following the 2-1 second-leg defeat, urging the crestfallen players to “keep going” through the run-in, an indication that no announcement on the manager’s position is imminent. Yet there is an expectation within the squad that Ancelotti will depart.

He and his staff, who were back at Cobham overseeing a light training session on Wednesday, accept such a relatively disappointing season will thrust the focus on their performances. They, like the players, remain committed to finishing the season with a flourish, which could see them overhaul Arsenal and go second. “We win together, we lose together,” the goalkeeper Petr Cech said. “We need to finish the season strongly for ourselves, for the club, for everybody. We are not only playing for the manager or the owner. We are playing for the entire club.”

Chelsea’s planning is not helped by the fact that the sporting director, Frank Arnesen, is due to leave for Hamburg at the end of the season. The Dane would have played a key role in the recruitment of a new manager, but his own replacement has yet to be determined.

The list of candidates would include some familiar names though José Mourinho – who still commands fierce loyalty from a faction within the Chelsea squad – has stated his intention to remain in Spain and Guus Hiddink, a previous interim manager at the Bridge, would likely only be available once Turkey’s Euro 2012 qualification campaign is complete. That could be as late as November.

The former Italy manager Marcello Lippi expressed an interest on Wednesday. “I’d like to coach Chelsea and the Premier League fascinates me,” he said. “I’ve had a satisfying year [off], but I miss coaching.” Yet the lack of an obvious and available replacement for Ancelotti will effectively see him through to the summer. The reserve-team manager, Steve Holland, had been mentioned as a possible stopgap until the end of the campaign because he has the relevant coaching badges, though that notion has been abandoned.

Whoever is in charge over the close season will have to oversee the continued regeneration of the team, with the exodus of older squad members expected to be quickened by the side’s failure to reach the latter stages of the Champions League. Didier Drogba, José Bosingwa, Paulo Ferreira and Nicolas Anelka will be entering the final years of their contracts and will effectively be available.

Younger players – such as Ajax’s Gregory van der Wiel and Anderlecht’s Romelu Lukaku – are on the list of targets.

Carlo AncelottiChelseaDominic Fifieldguardian.co.uk

• Tottenham have expressed interest in signing Cole
• Ballack wanted two-year deal but Blues offered 12-months

Chelsea are to release Joe Cole and Michael Ballack when their contracts expire at the end of the month after failing to agree terms over new deals with the experienced internationals.

Cole, currently with the England squad in South Africa, moved to Stamford Bridge from West Ham United for £6.6m in 2003 and made more than 200 appearances for the Blues. However, he has only played a bit-part role at the club since suffering a serious knee injury in an FA Cup third-round replay at Southend United early in 2009.

That lengthy absence frustrated his attempts to earn improved terms at the club, with the player’s wage demands proving at odds with the terms Chelsea were prepared to offer. Cole had been seeking around £100,000-a-week, with the Londoners only willing to match his current £80,000-a-week package. Negotiations have stalled in recent weeks, leaving his departure somewhat inevitable.

Tottenham Hotspur have expressed an interest in signing the 29-year-old midfielder, keen as they are to strengthen their squad with a potential Champions League campaign ahead.

The fact that Cole would be available without a transfer fee may offer them some leeway in compensating for his considerable salary. A move to Arsenal, which has been mooted in some quarters, still appears unlikely given the wage demands the England international is likely to make.

Ironically the Chelsea assistant manager Ray Wilkins this week insisted that the club would do everything they could to keep hold of the playmaker. “We’ve obviously been in dialogue with Joe for months now and it’s pretty evident that Carlo [Ancelotti] and myself would love Joe to stay, but it’s down now to the club to see what we can do,” he said. “We sincerely hope Joe stays with us – he’s a smashing guy and he’s a wonderful footballer so we’ll keep our fingers crossed.”

Ballack’s exit is, in many ways, more surprising but, again, is due to Chelsea’s desire to reduce their considerable weekly wage bill. The Germany captain, who will miss the summer’s tournament in South Africa after damaging an ankle in a challenge by Portsmouth’s Kevin-Prince Boateng in last month’s FA Cup final, had been seeking a two-year deal.However, Chelsea were only prepared to offer the 33-year-old, who joined the club from Bayern Munich under the Bosman ruling in 2006, a 12-month contract and were some distance apart when it came to agreeing terms on the financial package involved, with Ballack having signed on £121,000-a-week.

He departs having just claimed his first Premier League title and with Schalke 04, recently qualified for the Champions League, keen to secure his services.

The Guardian reported yesterday how Ballack has become the target for clubs in Dubai, including Al Wasl and Al Shabab. Although only a minor league, clubs in the emirate have huge financial resources and could provide a lucrative swansong for the midfielder. Sven Goran Eriksson, the former England manager and now in charge of Ivory Coast for the finals has also been approached.

ChelseaDominic Fifieldguardian.co.uk