Lee will be a restricted free agent this summer after the Knicks were unable to come to an agreement on a contract extension before the start of the season. It is believed that Lee, who will make $1.7 million this season, was seeking about $10 million per season in a new deal.

With the focus on having salary-cap space for 2010, Donnie Walsh wasn't inclined to give out lavish raises off a 23-win team. But after watching Lee for almost half a season, Walsh has told confidants that he has changed his mind about Lee.

"Unless someone blows them away with a trade," one source said, "[Lee] was told the preference is to sign him to a long-term extension."