Everton will hold talks with Watford to avert a heavy sanction should they appoint Marco Silva, the former head coach at Vicarage Road, as manager.

Silva is Everton's choice to replace the outgoing Sam Allardyce, but the acrimony following an alleged illegal approach last November has not receded, despite the Portuguese coach's subsequent dismissal by Watford.

The Hornets want significant compensation for the disruption to their campaign and have filed an official complaint to the Premier League. In the most extreme scenario, Everton face a points deduction if the accusations of ‘poaching’ are proven, but a fine is the greater possibility should it go that far.

Watford claim illegal negotiations were conducted following the sacking of Ronald Koeman in October, a point they first raised in a public statement in January when dismissing Silva.

The Premier League urged the clubs to mediate rather than launch their own probe, and there was a meeting between Everton and Watford in April in an effort to resolve differences.

Sam Allardyce is on the verge of leaving Everton credit: Action Images

At the same meeting Watford felt they had received an assurance Silva would not be pursued by Everton this summer. That guarantee does not look solid now, with Silva the preference to take over once Allardyce’s brief reign is formally ended.

If Silva becomes Everton's next manager, Watford are ready to explore all options at their disposal under Premier League rules.

Allardyce's exit should be confirmed by Wednesday night – Everton’s majority shareholder Farhad Moshiri is arranging a meeting with the ex-England boss to thrash out the exit terms, which is expected to be presented in a statement as ‘mutually agreed’. Allardyce recognised he could not continue given the negative fan reaction to his brief tenure.

Silva has been in limbo since his sacking, monitoring developments on Merseyside and waiting to see if the opportunity he craved early last season would again present itself.

He too is in dispute with Watford regarding alleged breach of contract, a matter being handled by the League Managers Association.

Crucially, he did not have a ‘break clause’ in his Watford deal at the end of his first season, so reviving negotiations with Everton will irk his former club, given their suspicions a deal was actually agreed six months ago.

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The complications may delay a quick appointment. Unless Everton and Watford can agree a package it could prove a lengthy legal dispute, especially if the Premier League are forced to intervene.

More likely is Everton agreeing to pay significant compensation, but Watford have already rejected £12million. That was when Everton first targeted Silva when he was still in employment.

The costs of recruiting a new coach are piling up for Moshiri. As well as compensation upwards of £12m, he will have to pay Allardyce the remaining year of his Goodison contract. That amounts to £6m.

Silva was earning £2.4m a year at Vicarage Road, so will have been offered a healthy salary increase to move to Everton.

Everton are still paying Koeman a portion of his £6m a year salary as part of his termination agreement, despite his new job as Holland head coach. His Everton contract had 16 months to run when he was sacked. And in 2016, Everton had to pay Roberto Martinez £10m following his exit.

Moshiri knows his wish to recruit Silva comes at some cost. He must hope the new manager is more successful at satisfying the club’s fanbase as his immediate predecssors, earning himself time at the start of next season. Everton can ill afford another recruitment error on and off the pitch.