Marco Silva has stepped down as Hull City’s manager after a meeting with the relegated club’s owners on Wednesday night and is weighing up interest from Watford and Crystal Palace to prolong his stay in the Premier League.

The Portuguese met Assem and Ehab Allam at the Hallmark hotel in North Ferriby and confirmed his intention to leave the KCom Stadium, effectively as a free agent, after five months. The 39-year-old’s preference has been to remain in the English top flight, despite reports from Portugal that Porto were keen to lure him home, and Palace and Watford have made clear their interest with his representatives.

Those clubs are managerless and considering their options following the resignation of Sam Allardyce and sacking of Walter Mazzarri respectively, though the financial package potentially on offer to Silva at Vicarage Road would trump that likely to be proposed at Selhurst Park. Silva is deliberating his next move and, should he make clear he considers a switch to Watford more tempting, Palace will turn their attention more vigorously to the pursuit of the Burnley manager, Sean Dyche, whose achievement in steering the Lancashire club to safety this season has not gone unnoticed.

Dyche’s side put in a tactically cute and assured performance to defeat Palace 2-0 at Selhurst Park in April, completing the double over the south London club in the process, to secure their only away win of term. A seven-figure compensation package would need to be paid to secure Burnley’s manager of five years, but it is understood he may be receptive to a new challenge. The former England manager Roy Hodgson, a former Palace youth-team player, is interested in the position vacated by Allardyce this week.

Silva, who won six of 18 league games in his 139-day spell in charge of Hull, will be joined by his assistant head coach João Pedro Sousa, his first-team coach Goncalo Pedro and his goalkeeping coach Hugo Oliveira at his next employers, with all having left their roles at the KCom Stadium. Hull are expected to confirm their departure on Thursday.