The 32-year-old had been a target for Saints Premiership rivals Newcastle, who were keen to see him join their coaching staff.

But Grayson, signed by Northampton from Waterloo 10 years ago, is to remain at Franklins Gardens until the end of the 2004/2005 season at least.

My heart is in Northampton, and always has been, he said.

It has always been my intention to stay on here. Fortunately, my contract has been extended for another year, so I will be staying, which is fantastic.

Grayson has played 240 games for Northampton, amassing more than 2,600 points, and he kicked the three penalties which saw Saints crowned European champions in 2000.

The Lancastrian also enjoyed an England renaissance this season, gaining selection for Sir Clive Woodwards World Cup squad and then starting RBS 6 Nations games against Italy, Scotland and Ireland.

During the RBS 6 Nations, he reached 400 Test points and overtook Rob Andrew as Englands second-highest international scorer behind World Cup final hero Jonny Wilkinson.

But a calf muscle injury struck halfway through the campaign, and he missed the final two games against Wales and France as Baths Olly Barkley took over.

Grayson made his England debut in 1995, and he has won 32 caps, averaging more than 12 points per Test.

Pauls career so far at the Saints has been outstanding, said Northampton operations director John Steele.

His form, not only as a kicker, but as a player who can adapt to any game-plan has been second to none. He is a popular figure off the pitch and we are delighted that he has committed himself to a new contract.