JAMES Hird may return to coaching late next season and find himself working without pay.

Essendon has declined to confirm reports it had continued to pay its banned coach through the first three months of his 12-month suspension, despite the AFL's intention he could not receive a salary from any club.

A standoff between the League and the Bombers is now developing that could lead to Hird starting his 12-month suspension period without pay in December.

This scenario would open a window late next year where the coach could return to the club in an official capacity but would not be eligible to be paid.    

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Mark Thompson will coach the Bombers for the entire 2014 season, including a possible finals campaign after being appointed interim senior coach in October.  

Hird would be available to return from August 25, but he convinced the board it would be unwise for him to return to the senior job on the eve of September.  

He could, however, return in another role and work within the football department from late August.

It is understood the AFL is not concerned if Hird's 12-month period without pay does not marry up with his 12 months out of the game.

The prospect of him returning to Essendon and working while he is unable to be paid has been discussed by the League.

It is a situation that is unlikely to provoke action from the AFL Coaches Association.

Twitter: @AFL_Nathan