City have begun talks to keep manager Nicky Law. Chairman Gordon Gibb said he wanted Law to feel wanted.
But Gibb also blasted the "Third Division" tactics which led to the embarrassing Carling Cup exit to Darlington.
Law's contract runs out at the end of the season and Gibb believes now is the right time to lay down foundations for a new deal.
He said: "There is a long way to go before we put pen to paper but the bottom line is that Nicky knows that he is wanted by the club. We've started to talk about what kind of shape a contract extension would take and we're coming up with a structure. I've spoken with Nicky about it and he's now gone away to have a chat with his family.
"There is no immediate rush although we felt it was the right time to start having these discussions."
But Gibb was unimpressed with the manner of City's latest cup defeat to lower-league opposition, even though the club had budgeted on going out at the first hurdle.
Gibb said: "It was stale and extremely disappointing. We needed a catalyst, that something to set us apart. I thought our tactics were similar to a Third Division side.
"Running about a lot and chasing everything isn't enough to get through. That's meat and drink for Darlington, it's the sort of football they face every Saturday.
"Perhaps it was a reaction from the Norwich game and the heat which must have been gruelling. But unfortunately it maintained our poor recent history on the cup front."
Law is confident he can lift morale for tomorrow's visit to big-spending Cardiff, who are likely to unveil new signing Alan Lee.
Law said: "Ninian Park is an intimidating place to go. They have spent a lot of money on players from a higher level and have built a star-studded side.
"They've just spent another million quid on Alan Lee so they've got a problem picking between recognised, proven strikers. That's a nice one to have."
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