Duff's move will come as a blow to Liverpool who were hoping to lure the Republic of Ireland winger away from Ewood Park.

Liverpool were set to launch another bid to sign the 23-year-old but Duff has given manager Graeme Souness a huge boost by saying he is staying.

"I'm very happy here," said Duff in the Lancashire Evening Telegraph newspaper.

"I think my game has improved no end in the past year working with the lads and the staff, so I'm definitely going to stay on and try and improve my game even further.

"I haven't prolonged it or anything, it's just that talks went on for that long and it didn't have that much to do with me. So when it's ready to sign, I'll sign it."

Duff attracted interest after his impressive World Cup campaign but says he would have signed a new deal sooner if it was ready.

Instead, he will sign it when he returns from international duty later this week.

"If it was there to sign on Friday I would have signed it," added Duff.

"But at the moment it's just not quite ready so, hopefully, by the time I come back from international duty later this week everything will be sorted out.

Duff impressed during Blackburn's season-opener against Sunderland on Saturday but says the speculation over his future did get to him.

He said: "I'm still a young lad and all the speculation hasn't really been fair on me.

"It's definitely affected me but all you can do is get your head down and work hard, which is what I've tried to do throughout it all.

"I felt tired last week against Lazio (in a friendly) and I thought that showed in my performance so I wasn't too happy at all.

"I think some of the fans thought I was in a mood or whatever and not happy at the club but it wasn't that at all, I just wasn't happy with my performance because I felt so jaded.

"However, I felt a lot better against Sunderland on Saturday so hopefully I can now carry that on for the rest of the season."