Xavi Hernandez will stay on as Barcelona manager, the club's president Joan Laporta told a news conference on Thursday, after reversing a previous decision to resign at the end of this season.

"We know that he made some statements in the middle of the season, but today we have the good news that he is staying and he has conveyed to me the enthusiasm and confidence he has in the project," Laporta said.

"Xavi will continue and is very excited, there is unanimity in the club's board that he should continue," club vice-president Rafa Yuste told reporters outside Laporta's home in Barcelona later on Wednesday.

Xavi played for Barcelona for 17 years, making 767 appearances and winning 25 trophies, including four Champions League titles and eight LaLiga crowns.

But despite being a club great and winning LaLiga last term, Barca's stuttering form this season put him under pressure.

When he first announced his decision to step down in January, Xavi said that he felt "liberated", adding that the pressure and demands of the job meant that he could not enjoy himself at his boyhood club.

Xavi said then that his decision was "for the good of the team" and that the players would "be freed up" moving forward. His words were heavily criticised by pundits, but seemed to have a positive impact, with Barca going unbeaten in their next 13 competitive games.

Yet two defeats in their last two games have left them facing a trophyless season. A 3-2 LaLiga loss at leaders Real Madrid on Sunday left them 11 points adrift of their bitter rivals with six games left.

That defeat came a few days after they were knocked out of the Champions League in another heartbreaking 4-1 defeat against Paris St Germain.

Sources told Reuters that Xavi was promised that no major changes in his staff were expected and Laporta assured him that they will be able to sign top-level players, despite the club's deepening financial problems.

Barca face challenges related to their massive wage bill and a 1.6 billion-euro Camp Nou stadium renovation project and it could be another challenging close-season for Xavi in the transfer market when they may be forced to sell key players to meet LaLiga's financial control requirements.

"It was a not a simple decision, in January I said (I would leave) because I thought it was best for the club," Xavi told a news conference.

"I am full of hope, these three months have made me change, the players believe in it, and wise people are willing to rectify, here I am.

"It's not about ego, or money, I have energy, I see the fans are happy and proud -- it's a cocktail of reasons, above all the confidence of the president and (sporting director) Deco."

Xavi said although the team he took to La Liga glory last season have failed to achieve their objectives, they have now proved they can equal Europe's best sides.

"Above all I said yesterday to Deco, the president... that the team has improved a lot," explained Xavi.

"Two years ago we went to Bayern (Munich) and I had the feeling that we weren't up to it. Now I think we're in shape to compete with the biggest teams in Europe.

"I have the feeling that this year (the Champions League) escaped us by just a couple of small things, we will try again, I'm excited to -- now it's in our hands."

Xavi said reports he was only staying because of money were designed to "hurt" him.

In January he claimed coaching Barcelona was "unpleasant" and "cruel", and Xavi said he did not expect that to change.

"Coaching here is very hard, but I see myself with the energy to keep leading the project," he added.

Barcelona president Joan Laporta said he was glad Xavi was staying and that it was good for the stability of the club.

"It's great news that Xavi is staying," said Laporta.

"The team we have, that is (still) consolidating, with very young players, needs that stability.

"Xavi is a reference for young players and we can see that -- today I'm especially pleased, and the board have unanimously supported this decision."