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Taylor said: "I felt the time was right for Peter Enckelman to be promoted to number one.
"And that is why I took the decision to release Peter Schmeichel even though he is still a very capable goalkeeper.
"I felt the time had come for him to have his chance to be the Villa number one after he had served an apprenticeship under David James and Schmeichel.
"I also didn't want to risk losing Peter Enckelman and I am really pleased with the way he has been performing.