Capello may be in breach of contract

The Italian spoke out in defence of Terry, who was removed as England skipper by FA chairman David Bernstein on Friday without any consultation with Capello, during an interview with Italian broadcaster Rai 1 on Sunday.

The FA opted to axe Terry as captain once it was known the Chelsea defender would not face trial over allegations he used racist language to Anton Ferdinand at Loftus Road in October until July, after Euro 2012. Terry denies the charge.

Asked whether he was in agreement with FA's decision, Capello said: "No, absolutely not.

"I have spoken to the chairman and I have said that, in my opinion, one cannot be punished until it's official and the court - a non-sporting court, a civil court - has made a decision to decide if John Terry has done what he has been accused of."

Speaking to BBC's Breakfast Time show this morning, Davies said that Capello, who reportedly earns £6million-a-year ($A8.8 million) as manager of the national side, may have breached his contract with his comments and could face action from the FA.

"It is being taken very seriously by the FA because it may be that Fabio Capello has breached his contract," said Davies.

"You have to ask what his motive is. You have to suspect he wants to prevent John Terry retiring as a player before Euro 2012 but there are wider issues.

"You could have what some of the media are calling a morality circus while England are trying to win the second major tournament in football.

"A contract may have been breached, there is strong leadership now at the FA from David Bernstein. Last week he wasn't slow to take things forward and he may not be slow to do so now."