SCUNTHORPE United will step up their efforts to agree a new contract with midfield man Michael O'Connor.

That follows a move from Championship newcomers Peterborough to snap-up the 23-year-old Northern Ireland international.

Manager Alan Knill is desperate to hang on to the midfield ace who is a key figure in his plans for the coming season in League One.

United have confirmed that a formal bid from Posh has been turned down.

That offer was less than the £225,000 package that Scunthorpe put together to sign the player from League Two outfit Crewe two years ago.

Knill is anxious to slam the door on any hopes Peterborough might have of signing, on the cheap, a player who would become a free agent next summer when his current contract expires.

"We felt the bid that came in from Peterborough did not reflect our valuation of the player," said the Scunthorpe boss of the midfielder, who won five senior player of the year awards last season.

"The offer was less than this club paid for him two years ago.

"He has not become a worse player since then, but a much better one.

"As soon as the bid came in, we informed Michael of it.

"He agreed that the offer was not a very good one.

"If Peterborough want to come back in with another bid for him, there is nothing I can do about that.

"It's a situation I have been in before when I was at Bury.

"But we are in a position where we do not have to sell, in fact we have even been prepared to go to a tribunal to sign Jimmy Ryan from Accrington.

"We think that Michael O'Connor is going to have a great season for us.

"We all know that he is a really good player – and when you have good players they are always an attraction for other clubs.

"I know there are some problems with a new contract that we have offered Michael, but we are trying to do something about that."

It was only two weeks ago that O'Connor's agent Freddie Akehurst revealed exclusively to the Telegraph his unhappiness with the terms of the new deal United were offering.

He claimed it was asking the player to take a substantial cut in wages – something later refuted by the club.

But clearly Scunthorpe have some ground to make up if they want to hang on to O'Connor.

Peterborough's interest in the player is likely to bring things to a head sooner rather than later, with a queue of admirers waiting in the wings.