Martin O’Neill believes Villa can mount a challenge for the UEFA Cup – but admits his squad must still be strengthened if they are to prosper at home and in Europe.

Villa are all but assured of a place in the first-round proper after their 4-1 first-leg win over FH Hafnarfjordur in the second qualifying round in Iceland and the job should be completed at Villa Park on Thursday evening.

They will join illustrious names like AC Milan, Sevilla, Borussia Dortmund and Feyenoord for what will be their first involvement in the competition for seven years.

O’Neill, who led Celtic to a UEFA Cup final in 2003, believes Villa can do well but has pointed to Tottenham and Newcastle’s recent struggles to juggle their Premier League and continental commitments as a cause for concern.

“I think we are contenders, I think we would be that, but we wouldn’t have any guarantees,” he said.

“Look at Tottenham – they won the League Cup last season but their league form suffered (they finished 11th) through it and you would have never imagined it with the team they had.”

He added: “Newcastle had a really decent run in the UEFA Cup two years ago. They were unlucky to lose to Alkmaar in the quarter-finals but the run took a lot out of them and they weren’t able to sustain their league form. So we are capable of contending, but whether we are good enough is another issue.”

O’Neill admits a sizeable squad will be essential. Reading striker Kevin Doyle is understood to be top of his shopping list and a deal for Newcastle’s James Milner could yet be resurrected.

“I want us to be involved and it will be a big disappointment if we go out of it,” he said.