Real confident Beckham will stay in Madrid.

REAL Madrid sports director Predrag Mijatovic is confident that the club's serious challenge for honors this season will convince David Beckham to stay on in Spain.

The former England captain has not won a major trophy with Real since moving from Manchester United in 2003, as the club suffered a downturn in fortunes.

"He hasn't had much luck in the last three years because when he arrived at Real he thought he was going to win many trophies," Mijatovic said in an interview with Serbian radio station B-92 and the BBC.

"Now the situation is different and I think he is conscious of this."

With a new team of president Ramon Calderon and coach Fabio Capello installed, Real is looking a much stronger proposition this season. It is third in the Primera Liga, three points behind leader Barcelona, and still in the Champions League and the Copa del Rey.

The main stumbling block to Beckham signing a contract extension is the fact that the 31-year-old has dropped out of favor with Capello. He has started only three out of 12 league games this season. "As far as I am aware, Beckham is happy here in Madrid. At the moment he isn't in the starting lineup but that's not to say that the situation won't have changed in a couple of weeks' time."

Meanwhile, Boca Juniors president Mauricio Macri said Real will have to increase its offer for Fernando Gago if it wants to sign the young Argentine midfielder.

Spanish media reports claim Real is prepared to pay between 15 and 20 million euros (US$19.79million-US$26.39m) for the highly rated 20-year-old, but Macri said that the nine-time European champion faced stiff competition from other clubs.