Spanish international Gaizka Mendieta has extended his contract with Italian club Lazio by two years, just weeks after Barcelona decided against buying the midfielder following his season-long loan.

A Lazio spokesman said on Thursday that Mendieta's contract would now run until June 30, 2008.

Mendieta moved to Lazio from Valencia two seasons ago for $41 million, setting a record transfer fee for a Spanish player.

However, he failed to find the form that made him one of the most respected playmakers in Europe and spent most of the time on the sidelines at his new club.

Mendieta then joined Barcelona on a loan deal and although he played in 33 league games, he did not impress enough to merit a permanent move.

Also on Thursday, Lazio confirmed they were in talks to sell striker Claudio Lopez to Spanish club Valencia, and that a decision was expected in the next few days.

The Argentine began legal proceedings against Rome-based Lazio in May to recover five months of unpaid wages and his former club Valencia are thought to want him back.

Lazio have been working to stave off financial collapse since their parent company, food group Cirio, defaulted on the payment of one billion euros worth of bonds last November.



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