Smith finally confirmed at Rangers, as Scotland lick their wounds

No surprises, then.

After a week of speculation, Walter Smith finally announced himself at a press conference, dressed in the club suit and tie of Rangers, confirming what everyone already knew - that he was the man to try and rescue the club from the indignities of this season and rebuild its reputation. Meanwhile, across Glasgow, the Scottish Football Association instigated legal proceedings against their former employee and the club.

The extraordinary truth is that Rangers and the SFA have still not agreed a compensation package for Smith, who had 18 months to run on his contract, and yet the announcement went ahead anyhow. As a statement of intent, it is a brutal one: when asked about the situation, the Rangers chairman, David Murray, simply said that the amount of compensation requested by the SFA was "unrealistic". Although he expressed hope that the issue can be resolved amicably, he was unapologetic about putting the needs of Rangers above anything else.

But beyond the level of compensation, there is another issue at stake. Smith quite clearly started working for Rangers before resigning from his position as Scotland coach - meaning not only that Rangers tapped him up, but that Smith was then in breach of contract. His new first-team coach, Kenny McDowall, gave the game away first, before Ally McCoist confirmed as much. "There was no hesitation at all, as soon as the manager asked me to come back I agreed", he said, when unveiled as assistant manager on Tuesday. So Smith was already working as the Rangers manager, when the SFA had refused permission for the club to speak to him. The SFA have described these relevations as "interesting". You bet they have.

It is likely that a compromise will be reached before the matter reaches the courts - frankly, the SFA can barely afford an expensive legal battle, and they could do without the distraction when their main priority is finding a new coach. Furthermore, while there is the possibility of further sanctions, it is unlikely the SFA has the appetite for the fight. Docking points or banning them from European competition would be bold assertions of authority, but realpolitik will intervene to ensure that the SFA does nothing that damages the interests of one of its biggest members, thus effectively sweeping the affair under the carpet. This will suit the short term interests of the parties involved, but a precedent has been set that chips away at the basis of the professional game.

What, for example, is now to stop a similar situation occuring between clubs, where a manager simply swaps employers by walking out on one contract and signing another? And while it might seem fanciful to suggest the same could happen with players, with individual registrations still controlled by national associations and FIFA, this seems to be the way the game is headed, with the rules bent to suit the needs of the bigger clubs. Perhaps Rangers will hold a press conference tomorrow to announce the signing of Scott Brown - and when Hibs complain that he is still their player, simply dismiss the quoted transfer fee as "unrealistic". Contracts are surely designed to allow all parties, regardless of their relative wealth, status or power, equal treatment, but they are becoming increasingly easy to circumvent.

Smith, meanwhile, after a cordial but hardly contrite performance at yesterday's press conference, clearly feels that criticism of his move has been unjust, and has tried to pin the responsibility on the SFA, saying that the risk of getting sacked in November if Scotland failed to qualify for Euro 2008 was a key factor in his decision. Apparently, his old bosses had not pushed him hard enough to sign a contract extension, even though - by his own admission - he had told them he was in no hurry to agree a new deal. He also has expressed surprise that the SFA are not showing him more gratitude for turning around Scotland's fortunes. None of which changes the fact that he has walked out on a clear commitment.

Still, what's done is done, and the Smith/McCoist double act, honed over the past 2 years, now faces a new challenge. It is not hard to see the reasons for success at international level, because their personalities do seem complementary. Smith is like your dour uncle - interested in what you've been doing, but you need to be on your best behaviour at all times. McCoist, meanwhile, is the mischevious older cousin, who's a bit naughty, but always fun. It just remains to be seen how it translates to the daily routine of club management, rather than the intermittment nature of the international set-up. McCoist has spoken about this being his dream start in management, but - at the age of 44 - he's not exactly a quick starter. Most of his contemporaries who went into coaching have around a decade's experience by now. Smith, meanwhile, is 58, and taking on a stressful and all-consuming job. Experience is great, of course, but the job will also require large reserves of energy.

Meanwhile, the search is on for a new Scotland manager. The SFA have indicated they will go for a home-grown appointment again, and such is the shortage of available talent that Graeme Souness has been spoken about in some circles as a front runner. If that's the case, Scotland really are in trouble.