O'Neill would rather add to his squad than lose anyone as he begins his second spell in interim charge this season after Wilfried Nancy was sacked just eight games into his tenure.

Reports had suggested Celtic were in talks with Birmingham over taking Kyogo on loan, but City manager Chris Davies said on Thursday he expects the Japan forward to stay with the Championship club.

Asked if the 30-year-old Japan forward could return, O'Neill replied: "I would have said that would probably be unlikely. I think those reports are sort of premature.

"I think there is a viewpoint that he wants to really prove himself at Birmingham, which is no surprise."

Kyogo has scored just once since signing for City in the summer after the unhappy six months with Rennes that followed his January exit from the Scottish champions, for whom he scored 85 goals in 165 appearances.

He started the 3-0 defeat by Watford but was back to coming off the bench for the 3-2 defeat of leaders Coventry City at the weekend.

Asked about a possible exit to Celtic, Davies said: "We've had no discussions at the moment about anything other than Kyogo giving his best and doing his best for Birmingham City.

"Kyogo is our player, who has been playing more matches recently than he has done in the last few months. Personally, I think he's going to stay here and potentially battle through whatever comes in front of him."

While he admitted that he expected a lot of transfer activity in and out of the club this month, he added: "Certainly, at this moment in time, Kyogo is an important player in the squad and will continue to be so."

Celtic go into Saturday's visit by Dundee United sitting third in the Scottish Premiership, three points behind Rangers and six adrift of leaders Heart of Midlothian after just two wins and six defeats in their latest eight games.

O'Neill admits that players might have struggled to adjust to the changes in system between himself and Rodgers, then Nancy and himself, and could benefit from a period of stability as they return to the style that recently brought seven wins in eight outings under the Northern Irishman.

However, the 73-year-old is also "well aware that we have to supplement the squad" during the January transfer window.

"Doing plenty of work on it," O'Neill said. "Hopefully try and get a few players in. I think it'll be crucial."

O'Neill recognises that Hearts and Rangers will be doing likewise.

"I'm hoping that we'll be able to do it, because I think that the two clubs you're talking about will see this as an opportunity to bolster their squads," he added.