Watford are “monitoring the situation” at Portsmouth but confirmed the club have received the first instalment from Tommy Smith’s transfer fee.

Portsmouth have been handed a transfer embargo by the Premier League until they settle the transfer debts they owe to other clubs.

The Hornets saw former talisman Smith and centre back Mike Williamson move to Portsmouth in the summer for a combined fee which could reach £5m after add-ons.

But Watford’s chief executive, Julian Winter, today said: “The club can confirm that the first instalment on Tommy Smith’s transfer has been paid by Portsmouth.

“We are monitoring the situation on the south coast and have every hope that the situation will resolve itself with the right outcome for all concerned parties.”