Rafael Benitez is in talks to succeed Carlo Ancelotti as Everton manager, but the former Liverpool and Real Madrid coach faces competition for the position from Belgium manager Roberto Martinez, sources have told ESPN.

Benitez, who has been out of work since leaving Chinese team Dalian Professional in January, in the frontrunner, according to sources, but would be a controversial choice as manager at Goodison Park after describing Everton as a "small club" during his six-year spell in charge of Liverpool between 2004 and 2010.

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The Spaniard has since claimed that his remarks were misinterpreted, but although sources have said that the 61-year-old has the support of Everton owner Farhad Moshiri, his appointment would risk a negative reaction from the club's fans.

Sources have told ESPN that Benitez has held discussions with Everton this week and is keen to take on the role to return to the Premier League, having left English football for China following his departure from Newcastle United in 2019.

Former Bournemouth manager Eddie Howe and Nuno Espirito Santo, who left Wolves at the end of last season, have also been considered by Everton since Ancelotti left the club to return to Real Madrid earlier this month.

Sources have told ESPN, however, that the appointment is now likely to come down to a straight choice between Benitez and Martinez, who is open to a return to club management at Goodison Park following a three-year spell in charge between 2013 and 2016.

The 47-year-old has made it clear that he is focused on Belgium's Euro 2020 campaign, with the team placed top of the FIFA World Rankings and one of the favourites to win the competition.

But sources have said that Martinez has the backing of Everton director of football Marcel Brands and club chairman Bill Kenwright.

Benitez's immediate availability could play in his favour, though, with the club determined to resolve their managerial situation as quickly as possible.

And the backing of Moshiri may also prove to be the significant factor for Benitez, despite the internal support for Martinez.