Born in the small town of Sunne in Värmland, a province of western Sweden noted for its lakes and streams, he was brought up in the nearby and even smaller town of Torsby by his parents: Sven, a bus conductor, and Ulla, who worked in a textile shop. At 16 he made his debut at right-back for Torsby IF before moving to study electronics in Säffle, where he played for SK Sifhalla. Aged 25, and now working as a PE instructor in Örebro, he joined Karlskoga, in the Swedish second division. There he was coached by Tord Grip, who later become one of his assistants with England.

Grip passed on the lessons he had absorbed from two managers, Bob Houghton and Roy Hodgson, who had successfully brought English tactics to Swedish football – particularly the 4-4-2 formation, with four defenders, four midfielders and two forwards. When the 29-year-old Eriksson was given his first coaching job, with Degerfors, he took that influence with him. After winning a divisional title, he was hired by IFK Göteborg, whom he took to league and cup victories before beating Hamburg in the two-legged final of the Uefa Cup in 1982, the first such success for a Swedish club.

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A few weeks into the following season, he resigned from Lazio to join England. His appointment, on an annual salary of £4.5m, was announced by Adam Crozier, the new chief executive of the FA. A moderniser, Crozier had been guided towards Eriksson by David Dein, a member of the FA council. As co-owner and vice-chairman of Arsenal, Dein had previously brought the French manager Arsène Wenger from Japan to revive the north London club.

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In January this year he announced that he had received a diagnosis of terminal cancer. In March he realised an early ambition to manage Liverpool when he was invited to lead a team of the club’s former stars in a 4-2 win over an Ajax team at Anfield. “Absolutely beautiful,” he said of the experience, at which he received a standing ovation.

He is survived by his partner, Yaniseth Bravo Mendoza, and her son, Alcides; by the son, Johan, and daughter, Lina, from his marriage to Ann-Christine, which ended in divorce in 1994; a granddaughter, Sky; and his father, Sven, and brother, Lars-Erik.