Ballack could move for free at the end of the season

Bayern this week withdrew the offer of a new deal made to Ballack, who is a free agent next summer and has been linked with Manchester United.

But Magath said: "I believe he's going to stay with us anyway."

The 29-year-old German international was expected to tell the club by the end of the month whether or not he was staying but he is still undecided.

But chairman Karl-Heinz Rummenigge earlier said: "We officially withdrew our offer.

"That doesn't necessarily mean he will leave but we will immediately sound out the market to look for a replacement."

Midfielder Ballack has also been linked with Real Madrid and both Milan clubs, and it is thought he could be sold by Bayern in the transfer window rather than let him leave for free at the end of the season.

Ballack has won two Bundesliga titles and two German Cups with Bayern Munich but has repeatedly said his major ambition is to win the Champions League.

Last week his agent Michael Becker said there was "absolutely no chance of him leaving in January" as "it would not make sense".

One of the reasons for this could be his enthusiasm for the Champions League, as he has already played for Bayern in this season's tournament so he would be ineligible to play for any other club in the tournament.