Veteran coach Luis Aragones has signed a contract extension that will see him remain in charge of Spain until the end of the 2008 European Championships.

It had seemed as though Spain would look elsewhere for a coach following the country's premature exit from the World Cup, where they lost 3-1 to France in the second round.

However, the Spanish football federation have backed the progress made under the 67-year-old Aragones and persuaded him to continue in the role.

Aragones, whose existing contract ran out following the World Cup, said: "The federation was finally convinced to renew my contract. The federation are happy with my work and I will remain for a further two years."

Aragones had said before the World Cup that he would leave his post if Spain did not reach the semi-finals in Germany.

But despite a good start to the campaign where they won all three of their group games, Spain fell at the first knock-out stage against 1998 World Cup winners France.

That exit prompted suggestions that Spain and Aragones would go their separate ways following the competition, but the coach has decided to commit himself to the post.

"If you want me to say that I made a mistake (at the World Cup), then I will say I made a mistake - even if I think otherwise."

He added: "The European Championships are an important aim and we are going to work hard in order to get there in the best possible shape."

Aragones took over as Spain coach from Inaki Saez in 2004 following the nation's first-round elimination at that year's European Championships.

Before that, Aragones had coached a host of Spanish club sides, including Atletico Madrid on four separate occasions as well as the likes of Barcelona, Real Mallorca, Valencia and Sevilla.