It had been widely reported that the under-fire O’Neill would part company with the Black Cats after recording just two wins in 22 league matches stretching back to last season.
But instead the Northern Irishman will have £8million to spend on new acquisitions next month, with Short eager to pay their way out of a relegation battle, The Mirror reports.
O’Neill is thought to be looking to one of his former clubs, Celtic, and a move for striker Gary Hooper. The former Scunthorpe front-man has been a consistent goalscorer at Parkhead with 48 goals since arriving in 2010.
Any deal would depend heavily on whether Celtic reach the knockout stages of the Champions League, presumably too good an opportunity for Hooper to turn down.
Celtic will learn their fate tonight after hosting Spartak Moscow, knowing they need to better Benfica’s result in Barcelona in order to progress.
The signing of Hooper would relieve some of the pressure on marksman Steven Fletcher, who has scored six of the side’s thirteen goals this season.
Sunderland will be sweating over the fitness of the Scotland international after he picked up a knock in Sunday’s 2-1 defeat at Norwich.
January’s transfer outlay will follow what was an expensive summer, as Short, a London-based American businessman, parted with a combined £22million to bring Fletcher and winger Adam Johnson to the Stadium of Light.