Capello's former No2 at England wanted to work with Andre Villas-Boas.
Tottenham Hotspur are to appoint a director of football to work alongside head coach Andre Villas-Boas with Franco Baldini the outstanding candidate.
Chairman Daniel Levy is convinced that the new structure is the way ahead for the Premier League club and will be another show of faith in the new head coach at White Hart Lane.
Spurs sources have dismissed any suggestion that Villas-Boas is under pressure and are hugely impressed by the way he has gone about his job of helping to reorganise the club.
On Sunday Spurs face Queens Park Rangers at home in the Premier League with Brad Friedel returning in goal, after another fine display in the 3-1 victory against Reading last weekend, to replace new signing Hugo Lloris who had featured in the 0-0 draw against Lazio in the Europa League on Thursday.
Baldini, who was Fabio Capello's No2 with England, is a strong contender for the Tottenham role but Spurs will have to work hard to lure him from his present role at AS Roma.
Baldini has a good relationship with Villas-Boas and had wanted to take him to Roma, where he is general manager, before the Portuguese was appointed by Chelsea last year.
Indeed Chelsea sources have claimed that Villas-Boas recommended the club employ Baldini as their own director of football. Instead Roman Abramovich elevated the former scout Michael Emenalo, who has overseen this summer's pounds 80?million spending spree.
Tim Sherwood, who is Spurs' technical coordinator, and one of the few to survive the backroom staff following the sacking of Harry Redknapp as manager, has been lobbying hard to become the new director of football.
However, he is not understood to be a serious candidate given his lack of experience in the role. If he is overlooked it is understood that Sherwood could consider his position.
If Spurs did manage to hire Baldini it would represent a real coup and a serious sign of intent that the club want to become a power in European football.
Levy has been overseeing transfers, and Spurs have undergone a busier than expected summer of change, but he has also always favoured the system of a head coach working alongside a director of football.
That system was abandoned when Redknapp was employed in 2008 following the sacking of Juande Ramos and the dismissal of Damien Comolli, who was director of football, but with the arrival of Villas-Boas it is set to be reinstated.
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