The SFA's David Taylor is pleased with Walter Smith's progress

The Scotland manager, contracted until 2008, has started the Euro 2008 qualifying campaign with two wins.

"Our stance is that Walter is doing an excellent job. He's got a contract and he's perfectly happy," said Taylor.

"Walter and I are in close touch, so as and when it becomes an issue we will deal with it."

Smith is preparing his squad for a tough double-header against France at Hampden on Saturday and Ukraine in Kiev next week.

And there will be a clamour for the former Rangers and Everton boss to agree new terms if the Scots emerge with credit.

But Taylor continued: "It's not a subject of current talk within the SFA.

"It's very much a matter for Walter himself and what he feels he wants to do.

"All my indications are that he's really happy in terms of what he's doing with the national team.

"It's a job that appeals to him, it's a job he's doing well and he feels comfortable with. Long may that continue."