Change of heart: Watson will sign for Wigan after being offered improved terms
Southgate contacted Palace about Watson after fearing he would lose midfielder Gary O'Neil to Portsmouth and was convinced he had seen off competition from QPR for the England under-21 prospect, as first revealed by Sportsmail last month.
Even when Fulham and Reading joined the bidding last week, Southgate remained confident of adding Watson's tenacity to his midfield, particularly after former Pompey favourite O'Neil made it clear he wanted to return to Fratton Park.
He has been left frustrated, though, after Watson opted for Wigan's promise of better personal terms and the chance to replace Tottenham-bound Wilson Palacios at the heart of midfield.
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