Smith and fellow Hornet Mike Williamson moved to Fratton Park at the start of the season for a combined fee which could eventually reach £5million.

Pompey have now been hit with a transfer embargo until they settle transfer debts owed to other clubs, but Watford say the first part of the Smith money has been paid.

"The club can confirm that the first instalment on Tommy Smith's transfer has been paid by Portsmouth," chief executive Julian Winter told the Watford Observer.

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