Watford have dismissed reports that a deal has been agreed to sell Tommy Smith to Reading.
Speculation has claimed that the Royals - now managed by former Watford boss Brendan Rodgers - were close to completing an £800,000 deal for Smith.
The striker was also understood to have rejected a move to Wolves in favour of linking up with Rodgers at the Madejski Stadium.
However, Hornets chairman Jimmy Russo has branded Reading's offer as 'derisory' and is adamant nothing has been agreed between the Championship rivals.
"As far as I am concerned there is no deal whatsoever with Reading," Russo told the Watford Observer. "I can 100 per cent guarantee that.
"They have made a derisory offer which I am not interested in."
Meanwhile, Watford have confirmed Nathan Ellington has returned to the club for pre-season training after Derby County opted not to take up their option to sign the striker on a permanent basis.
Hornets boss Malky Mackay, who has appointed Sean Dyche as his assistant and David Kerslake as first-team coach, has spoken to Ellington and is keen to ensure the player is fit for the start of the new season.