Watson wants to stay on home soil to extend his England career beyond the autumn’s World Cup in France.
The 29-year-old has found his options limited, however, with the Premiership salary cap lowering to a base £5million next season before rising to £6.4m for 2024-25.
Top 14 giants Castres have tabled a lucrative offer to tempt Watson to France, but that would likely curtail his England endeavours, due to the RFU’s policy on not selecting overseas-based stars.
Next season, England chiefs could look to extend the use of the “exceptional circumstances” clause which allows overseas-based players to be selected on rare occasions.
A more liberal interpretation of exceptional in terms of circumstances could potentially cover Watson, should the new salary cap constraints leave him struggling to find a suitable club in the Premiership.
The salary cap reduction has most Premiership teams still working to finalise their squads for next term, with more players than ever hunting clubs after Wasps and Worcester both went bust.
Saracens are yet to ratify the futures of Sean Maitland and Duncan Taylor, with Jackson Wray now retiring, while Tom Parton will arrive from London Irish in the summer and Tom Willis from Bordeaux.
Irish will lose Ollie Hassell-Collins to Leicester as well as Parton, leaving them pondering a move for Watson.
England, meanwhile, continue to work towards finalising their coaching staff for the World Cup under Steve Borthwick.
Saracens appear to have been successful in keeping scrum coach Ian Peel, leaving England looking closely at Leicester’s Tom Harrison.
England have already raided Leicester for Borthwick and assistant Kevin Sinfield, with Richard Wigglesworth and head of physical performance Aled Walters also joining from the Tigers this summer.