Souths chief executive Shane Richardson broke a promise in squeezing Shaun McRae out of the head coaching job but insists Jason Taylor's elevation is in the NRL club's best interests.

As the dramatic fallout from Ricky Stuart's dumping from the Roosters continued, the Rabbitohs on Wednesday announced Taylor would be the head coach for the next two years with McRae moved into a football director position.

And in a further twist, the New Zealand Warriors extended the contract of coach Ivan Cleary to the end of the 2008 season, with an option for 2009.

Despite denials from club officials, it's understood the appointments were made to prevent approaches from the Roosters, who are looking for a replacement for Test coach Stuart.

"You probably could say that, the circumstances have changed," Richardson said when asked if he reneged on a promise to retain McRae as head coach.

"I thought it was the best move for the short and long term.

"I felt that we'd be linked with uncertainty over the off-season and into next year.

"I just felt from our point of view we needed to make a call and I made that call.

"It boiled down to the bottom line, which is who I thought would do the job better.

"I felt under the circumstances, Jason would.

"It was one of the toughest calls of my life."

McRae now has a week to decide whether to accept a position as director of football operations, although Richardson expects him to turn it down.

"I'm not confident," he said.

"He took it hard, like a sledge hammer, I'd be lying if I said otherwise.

"He was disappointed, but I told him up front what the situation is, I didn't want him to read about it on the back page of the paper."

There was speculation Taylor, who had signed on to be McRae's assistant next season, would ask for a release to link with the Roosters.

The former halfback admitted the rumours had helped his cause, but denied putting pressure on Souths to take over the top job.

"I didn't speak to (the Roosters) at any stage, so I don't know where that came from," Taylor said.

"It probably doesn't hurt, having your name thrown around like that.

"I was always going to be at the Rabbits next year.

"I always appreciated the faith they've shown in me.

"I was really confident I was going to have a very senior assistant coach's role and that Shaun and I were going to work very closely together.

"It's good to know I will be the one with the final say on any decisions."

After the events of the last few days, Taylor said he realised he had to perform immediately or perish at the Rabbitohs.

"There's no guarantees for anyone in this business, I think everyone gets into it knowing that," he said.

"I don't think (there) any illusions that if you don't do a good job you'll still be around.

"I suppose you live and die by those results.

"I'm in amongst that now and I have to understand that's how it works and I do.

"It's going to happen to me one day, it makes you want to (keep it going) as long as you can."

While Richardson denied the Roosters' situation played a part in the decision, he acknowledged Taylor would have always been a poaching target unless he was made head coach.

"I'd made mind up last week ... this was the first chance I've had to (announce) it," he said.

"It was a decision we would have had to make in April or May next year anyway.

"I thought it was better to do it now."

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