According to a Mark Hughes piece I've just read in an e-mail link from Motorsport Magazine, Flabio spent the best part of last season trying to arrange a swap deal between Fernando and Hamilton. Apparently Toto wanted none of it because, according to Hughes, while Hamilton and Nico had their moments during the season they still got on relatively well and he didn't think the team dynamic would be the same with Alonso in the squad.
I think, between the two parties, Hamilton and Mercedes, the intention has always been long term but now they can talk seriously about the dosh, a reigning world champion should be due a pay rise I reckon.