Palacios was signed on loan for the first half of the campaign from Olimpia by the then Blues manager Steve Bruce.

He was available in a £700,000 deal when the transfer window re-opened four months ago.

But Bruce left for Wigan Athletic in December and took Palacios to the JJB Stadium after his replacement McLeish decided against signing the Honduras international who suffered the trauma of his brother being kidnapped in his homeland. Palacios has since impressed in the Latics midfield.

McLeish was then unsuccessful in signing Portsmouth's Sean Davis and Teemu Tainio, of Tottenham Hotspur, while a work permit was not obtained for Georgian international Levan Tskitishvili to leave him lacking options in midfield.

The former Scotland manager said: "I didn't know a lot about Palacios and my intention in January was to bring in experienced Premier League players or those of proven quality to make us better at this level. We tried to get Davis and Tainio.

"When I saw Palacios here, he wasn't bad and had a good touch - but we definitely didn't see what we've seen in the past few weeks at Wigan.

"Perhaps it was a case of getting him fit, getting him used to the demands of the Premier League and the situation with his brother. Maybe I should have taken him.

"But at the time I had to make quick decisions because I had other targets I thought I could get."

McLeish also had to juggle his budget to ensure he could bring in players like James McFadden and David Murphy for £5million and £1.5million respectively.