John Terry to stay at Chelsea

England captain John Terry has agreed in principle to stay at Chelsea and has dumped all his plans to join Manchester City.

The Daily Telegraph reported that Chelsea are expecting Terry to make a public statement about his intentions in the next few days.

The latest development is a big blow for City, who were confident of signing the central defender from the South London club.

The news will be of great delight for Chelsea manager Carlo Ancelotti who has been asked to create an identity for the club by Russian owner Roman Abramovich.

"It's too early to put my stamp on the team. I have the time to do this, I want to do this and I think that it's possible. We are here for this, to play well and to put an identity to the team," Ancelotti said.