A new club has joined Reading in the chase to sign Tommy Smith, pushing the price of the Watford forward up to £1.8m.
Chairman Jimmy Russo told www.watfordfc.com: "We've received a new bid today for Tommy and we will allow him to speak to the club in question.
"This is a new club that has expressed a desire to sign Tommy."
The Hornets meanwhile have snapped up ex-Middlesbrough forward Danny Graham, who was a free agent after the expiry of his Carlisle contract.
The Cumbrians are entitled to compensation for the 23-year-old.