It is understood that he Scunthorpe board have targeted Megson as their No.1 choice with Oxford boss Chris Wilder, Danny Wilson and Nicky Barmby also in the frame.
A Scunny source said: “Megson is in pole position – he knows how to get the best out of players and it is felt he is the ideal choice.”
Megson had a torrid time at Sheffield Wednesday and Bolton, where the fans were against his 'style' of play. If he takes the job it will be his tenth managerial post and amongst others he has previously managed WBA, Nottingham Forest, Blackpool and Norwich. He has been in charge for over 650 games in his long career.
Former Hull striker Dean Windass, 44, now a TV pundit, has also revealed he would like the job.