Melbourne backrower Jeremy Smith has rejected an offer from St George-Illawarra to stay with the NRL premiers, but his decision has meant there is no room at the Storm next year for Clint Newton.

Smith said no to the Dragons' three-year offer to re-sign with the Storm, saying he believed Melbourne offered him the best chance of continued success.

"I just felt at this stage of my career, the best place to be playing rugby league is here in Melbourne," Smith said.

"We've got a great coach at the helm in Craig Bellamy, and plenty of quality players in the squad so I don't see any reason why we can't have continued success here for the foreseeable future."

But fellow backrower Newton has been squeezed out of Melbourne by salary cap pressures after joining the Storm mid-season following his fallout with Newcastle Knights coach Brian Smith.

Newton had the last laugh, going on to play in the Storm's 34-8 grand final win over Manly last month.

Smith's decision to stay in Melbourne has extinguished any extra salary cap room for the club to keep Newton.

But the 26-year-old said he understood the club's position and harboured no hard feelings.

"I've had a great time at the Storm and I'll always be grateful they gave me the chance to continue playing in the NRL when I left Newcastle," Newton said.

"I can't speak highly enough of the club and if there's a chance of playing for them again in the future I'd definitely be interested."

Newton has already rejected an offer to rejoin the Knights next season and is now likely to sign a two-year deal with English Super League club Hull KR.

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