West Ham thought Bernard was out of contract and offered the Frenchman a three-year deal but Newcastle claimed the player was still under contract with them.

A Premier League arbitration hearing found in the Tyneside club's favour and, after dismissing Bernard's appeal on Monday, the 22-year-old signed a three-year contract with Newcastle.

"Olivier will be back in training on Thursday, which is what we wanted all along," said Newcastle chairman Freddy Shepherd.

"We have been proved right and we will now look into whether or not we are going to pursue legal action against West Ham.

"A contract is a contract and that is what the tribunal and appeal have both proved.

"We are delighted that Olivier has now committed his future to Newcastle and we look forward to seeing him in a black and white shirt again."

Bernard was unhappy at St James' Park last season because of a lack of first-team opportunities, but Shepherd has challenged the left-sided player to earn his place.

Bernard's chances should increase this term with the club involved in the Champions League.

Shepherd added: "Olivier has a great future ahead of him. We saw his potential last season.

"And if you look at the changes happening in the France squad, he has every chance of making his mark at international level over the next three years."

Meanwhile, speculation that Shepherd is planning to take the club off the Stock Exchange has increased.

Shepherd's company, Shepherd Offshore PLC, bought more than five million ordinary shares to take their stake in the club to 21.57%.

But a Newcastle spokesman said: "Taking the company private has never been discussed at the PLC board."