Mark Hughes, the Manchester City manager, having sealed a club-record deal this week for Jô, the Brazil forward, continued to make progress yesterday, when Richard Dunne, the club captain, who had appeared likely to leave before the Welshman's arrival, signed a new four-year contract.

With a year remaining on his previous deal and no secret made of his disenchantment at the club's treatment of Sven-Göran Eriksson, the former manager, Dunne, 28, was courted by Tottenham Hotspur and Portsmouth at the end of last season. But the Ireland defender, who has been named the club's player of the year for the past four seasons, has committed himself until 2012.

Dunne's departure would have been a serious blow to Hughes and might have led to other key players, such as Micah Richards, Michael Johnson and Joe Hart - who is also close to signing a new contract - questioning the direction of the club, but he will be a key figure in the new manager's rebuilding.

“I'm delighted with the outcome and Richard is a really important player for us,” Hughes said. “It was one of my priorities when I took the job that I made sure that he was one of the players we needed to keep.”

Dunne said that Hughes was a key ingredient in him agreeing to stay. “My priority always has been to stay at City because I've enjoyed it so much and I feel really settled here,” Dunne said. “When Mark Hughes got the job, everyone was really pleased and I was thrilled that he seemed to make it a priority to sort my contract out. I'm delighted to be able to stay. It took a couple of days and it was all done and dusted.”