McRae: Subaru deal not looking good.

1995 World Rally champion Colin McRae has admitted that a return to Subaru in 2004 is currently not 'looking very good'.

McRae, who was dropped by Citroen following changes to the regulations, has been in negotiation with the Banbury-based squad since news broke that Richard Burns would not be able to take up his place with the team after he was diagnosed with a brain tumour.

The Scot visited Subaru on Wednesday and, according to reports by British newspaper The Guardian, has also tested the Subaru Impreza WRC since then.

Speaking last night though, McRae reportedly told the broadsheet newspaper: "I've nothing to say at the moment. It's not looking very good."

McRae had been thought to be favourite for the second seat alongside Petter Solberg, and currently he still seems to be the best option, with Harri Rovanpera and Mikko Hirvonen the only other realistic possibilities - although some have suggested that Tommi Makinen might go back on his decision to retire.

One stumbling block could be McRae's decision to take part in the Paris-Dakar Rally next month. The deal with Nissan means he will have only five days rest before going straight into the Monte Carlo Rally, the opening round of the 2004 FIA World Rally Championship. Testing for the Dakar event may also limited his time in the Impreza, something that could adversely affected his WRC performance.

Such reports though seem to contradict other sources, and BBC Sport Online reported yesterday that a deal was 'close' after 'positive' talks in Japan.

Team boss David Lapworth commented: "The meetings in Japan were very positive. Were looking to be in a position to make a full assault on the championship next year."

2003 WRC champion, Solberg meanwhile, has revealed he would not be against teaming up with McRae.

He told the BBC: "It's not something I would object to. I actually think it would be positive."

Subaru has yet to release any official statement.