After two days of inquests following the 1-0 Premiership home defeat by Reading on Sunday, it is understood Pardew had to be persuaded to stay at Upton Park - but he only agreed on the proviso that the proposed takeover by investment company MSI did not go ahead, reports the Daily Mirror.
The decision will almost certainly lead to the exit of Argentinian duo Carlos Tevez and Javier Mascherano in the January transfer window, despite being two of the most sought-after players in world football when they joined the Hammers in August.
Pardew's anger at interference from MSI, the company who signed the Argentinians, boiled over after his side lost for the fifth match in a row to slip to 16th in the league, out of the relegation zone only on goal difference.
Pardew has so far failed to fit Tevez and Mascherano into his system and is also frustrated by the former's fondness for London's nightlife as well as his lack of English.
An insider told the Daily Mirror: "The board wasn't left with very much option. It either let Alan walk out, or did the right thing for the club."
