Watford are still in advanced talks about a potential takeover despite ending discussions with one consortium because the group was headed up by a convicted fraudster.

The Watford Observer understands the Hornets board had been in talks with two parties but negotiations with a consortium were ended when it became clear the front man, Paul Anthony Garland, had been jailed for two-and-a-half years in 2006 after pleading guilty to 11 counts of obtaining money and property by deception.

The Guardian newspaper reported the consortium had planned to move Watford away from Vicarage Road but we understand the issue was not discussed with the Hornets board.

Watford are unable to comment on the potential takeover due to Stock Exchange rules but we understand Garland had only been calling himself Paul Anthony and talks ended immediately when his true identity came to light.

Garland’s consortium was not the investor who entered discussions with the major shareholders late last year and it is understood takeover talks are still ongoing.

The Guardian had claimed the consortium fronted by Garland had hoped to “exploit the council’s willingness for the club to move to an out-of-town stadium, while developing the Vicarage Road property”.

We understand the Watford board had not discussed the possibility of moving away from their current home with either party and unless a new investor comes to the table and decides otherwise, then it is highly unlikely the club will be leaving Vicarage Road.

Watford Borough Council have also dismissed the suggestion they were keen for the club to move away from their West Watford home.

Mayor Dorothy Thornhill said: “The council has no say in whether the club moves or not, as we don’t own the land, but I have always made it clear that I want Watford FC to remain at Vicarage Road.”

The Hornets’ parent company, Watford Leisure Plc, announced major shareholder Lord Ashcroft was in early discussions with a potential investor on December 3.

It is still unclear if or when the takeover will be completed but the Watford Observer understands Malky Mackay’s transfer plans will be affected by whether an agreement is made before the transfer window closes.

The Hornets are expected to make signings regardless but, if the deal is agreed in time, then it is hoped the squad could be strengthened further.