Chauncey Billups is back in the fold for the Knicks next season, but there is no guarantee he will finish the year with them.
Yesterday’s decision not to buy out Billups, despite his nightmarish, injury-wrecked playoffs, is a no-brainer on several levels.
Billups’ trade value could be significant next season if the Hornets put pending free agent Chris Paul on the block at the trade deadline or the Magic try to trade Dwight Howard before he reaches free agency next summer. The Knicks have a paltry amount of trade chips as it is.
Billups will make $14.2 million next season, an expiring contract for a player still considered among the top 10 point guards in the NBA.
In another scenario that Billups would love, the Knicks could deal Billups back to his hometown Nuggets this summer in an attempt to get back restricted free agent Wilson Chandler and Raymond Felton, neither of whom is happy in the Rocky Mountains. The Knicks, as reported in yesterday’s Post, have an interest in trying to woo Chandler back to New York.
Billups now is set for next season, team president Donnie Walsh appears set to return — a new deal could be finalized by week’s end — and coach Mike D’Antoni may know by tomorrow that he is returning, too.
Knicks owner James Dolan is preaching stability more than ever following another season of roster upheaval created by the Carmelo Anthony trade.
In the wake of The Post’s report that Walsh is expected to return next season, the Knicks president made the announcement Billups will be kept.
Billups could have been waived by tomorrow’s deadline and bought out for $3.7 million. The savings, however, would have brought the Knicks under the salary cap by, at best, $8 million, and they would have been in dire need of a point guard amid a bare free-agent crop.
“We have made a decision to keep Chauncey Billups for the upcoming 2011-12 season,” Walsh said in a statement.
“Chauncey, Amar’e [Stoudemire] and Carmelo are a great nucleus, as we continue to look to improve our team going into the offseason. Chauncey is an extremely talented and experienced point guard — we are very happy to have him back.”
The drama surrounding Billups grew because of the left knee strain he sustained at the end of Game 1 against the Celtics, forcing him to miss final three games of the Knicks’ first-round sweep. He would have returned in the middle of the second round at the earliest had the Knicks advanced.
Billups also missed six games with a thigh bruise soon after he was acquired. Durability had become a concern for Billups, who will turn 35 next season.
“We appreciated the gesture on their part,” said Billups’ agent, Andy Miller. “It was smart and the right decision to make. I didn’t see any other decision to consider.”
Billups injured his knee in Boston when he launched for a layup and felt a twinge. He landed awkwardly because he was tried bracing the fall, knowing he was hurt. Miller said the injury was not related to age.
“It could’ve happened to anyone if they were 5 or 55,” the Jersey-based agent said. “It had nothing to do with age.”
During Monday’s breakup day, Billups said his body felt great, but he planned on dropping five pounds to adjust to D’Antoni’s system.
“My body has been great,” Billups said. “I’m 34, not 39. My first five years I didn’t play that much anyway, unfortunately, but my body is fine. My game is more mental. I’m going to beat you, and I’m going to outsmart you.
“I loved being a Knick this year,” Billups added. “It was a great time. I would love to be a part of bringing championship-caliber basketball back to the city.”
Anthony, who made his only conference finals once Billups joined the Nuggets in the middle of the 2008-2009 season, was hoping for the point guard’s return.
“I’ve been with Chauncey for a while now,” Anthony said. “Everybody knows what he brings to the table when he’s healthy and playing — a winner, leader, a veteran guy that a lot of people on this team look up to.”
Stoudemire also campaigned for Billups’ return.
“Chauncey, I know for a fact, will get his knee healthy and will be ready to go for next season,” he said.
The Knicks did not make Walsh available to the media for a third straight day as the club works to finish a new deal. But that the team released a statement with his name on it was a positive sign things are going well in negotiations.
The last issue remaining was Walsh’s desire to have contractual assurances he is the No. 1 guy in basketball operations after being concerned of the growing influence of Dolan’s Garden lieutenants. Sources said that issue is expected to be resolved.
marc.berman@nypost.com