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Manchester United face a "challenge" to re-establish themselves as the top team in Manchester after falling behind their bitter rivals, according to Nicky Butt.

The 3-1 derby defeat to Manchester City at the Etihad Stadium on Sunday saw United slip 12 points behind Pep Guardiola's champions.

City have won two Premier League titles since United's last success in 2013 and Butt, the club's academy boss after 12 decorated seasons as a player, admits they have been overtaken in their own city.

"For Manchester United now we have got a challenge on to get back to where we want to be, which is the biggest club in the country, but also in the city," Butt told the Premier League Sports Network event.

"That challenge is there for the owners, the board, the manager and the club in general to be where we want to be. And, to be honest, we have got a challenge on our hands to get there."

Butt lifted the Champions League trophy with United as part of an unprecedented treble in 1999, while City won the playoff final to escape the third tier of English football.

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But since their takeover in 2008, City have turned into one of the biggest clubs in Europe and Butt has said their transformation on and off the pitch has been "impressive."

"I remember in the local area when the rumours started about them buying a lot of land in the east Manchester area and looking to build this massive complex, like a little mini city within the city, and you don't think it is going to happen," he said.

"Before you know it, it's there and you think 'very impressive.'

"It might not be everyone's cup of tea but you've got to admit it is an impressive place to be. And they are winning things.

"Their next challenge is the European Cup because, until you win the Champions League, you can't really be compared to the best teams in Europe. That's their next challenge."

Ashley Young will ensure he will be part of Jose Mourinho's first-team plans before penning a new contract at Manchester United, sources have told ESPN FC.

Young, whose contract is set to expire at the end of the campaign, has been offered a new one-year deal with the option of another season to extend his stay at Old Trafford.

The 33-year-old was Mourinho's first choice left-back last season but after losing that spot to the resurgent Luke Shaw, has become United's regular right-back, starting nine of the last 10 games including heavyweight clashes with Juventus and Manchester City last week.

Last season's right-back Antonio Valencia is fit again after injury but has been kept out of the team by Young's form. Young is keen to stay at United but will prioritise regular first-team football in making his decision.

Sources have told ESPN FC there is interest in the winger-turned-defender from teams in the Premier League and Major League Soccer in the United States. The England international, who featured for Gareth Southgate's side at the World Cup in Russia, has not ruled out playing abroad before ending his playing career.

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United have already tied down Shaw with a new long-term contract while negotiations are ongoing with Ander Herrera, David De Gea and Anthony Martial. Herrera will be a free agent at the end of the season if fresh terms are not agreed but sources have told ESPN FC talks are progressing.

United will trigger an option in De Gea's deal to keep him at the club until at least 2020 but negotiations over a longer agreement are proving difficult, with little progress made over the last month.

Antonio Conte has insisted he is in no rush to return to coaching after Real Madrid confirmed to the Spanish Football Association that Santiago Solari will remain in charge of the team for at least the rest of the season.

Chelsea and Conte remain locked in a legal dispute relating to his acrimonious departure from the club in July, with the Italian maintaining he should be paid in full for the final year of his contract at Stamford Bridge and the club claiming his behaviour contributed to his own sacking.

According to reports, Madrid considered appointing Conte as successor to the sacked Julen Lopetegui last month, but turned their attentions elsewhere amid concerns he would demand too much power and antagonise a powerful dressing room with his uncompromising style of management.

Speaking to Sky Italy, Conte hinted he did not feel Madrid was a good fit and confirmed he wants to choose his next club carefully.

"Hopping on a moving train is not good for top coaches and right now, I don't feel the need to return immediately," Conte said. "Maybe I'll change my mind in two or three months -- never say never -- but today I'm really convinced that it's best to wait for a project all of my own."

Sergio Ramos reportedly played a key role in Madrid cooling their interest in Conte, voicing his concerns about him privately to president Florentino Perez and pointedly asserting publicly that "respect is won, it is not imposed" to Spanish reporters when Conte was touted as a replacement for Lopetegui.

"We've always got to show education and respect when we arrive at a new club, and the same has got to come back from the players, because when these kind of things are lacking, that's when you start having problems," Conte said.

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Is there such a thing as peaking too early? Given all that Kylian Mbappe, just 19, has accomplished, we might soon find out.



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The biggest problem with the Champions League is that it's trying to be everything to everyone. It's time for the tournament to go rogue.

Deliberate isolation. Petty feuds. Constant turmoil. The Manchester United manager wouldn't have it any other way, writes Sam Borden.

Is there such a thing as peaking too early? Given all that Kylian Mbappe, just 19, has accomplished, we might soon find out.

The biggest problem with the Champions League is that it's trying to be everything to everyone. It's time for the tournament to go rogue.

"But I've got nothing to say about Real and Ramos -- my history speaks for itself, both as a footballer and as a coach, and in general, it's a winning story, so I don't have to reply to anybody."

Conte's difficulties settling into life in England were a persistent theme during his time in charge of Chelsea, but he revealed that he and his family have remained living in London since his sacking.

"I'm fine the way things are -- my bench is in my own home," he said. "We're still living in London, which is where [my daughter] Vittoria is going to school."

He added with a smile: "I've told her to learn English well because she can be my interpreter in future. She's also already got some football boots and likes football, asking me to coach her a bit. I've already started to teach her a few tactical and technical things."

ESPN