ANTHONY Watmough and the Parramatta Eels are headed for a $1.2 million legal showdown, with the former Test forward prepared to return to pre-season training in order to receive his promised career-ending injury payout.

Watmough was in shock this week when he discovered Parramatta is attempting to operate outside the Collective Bargaining Agreement by offering him a reduced figure, ‘significantly less’ than the value of his $1.2 million contract.

Watmough was forced into premature retirement this season with a debilitating knee injury, just 12 months into his four-year deal, worth around $750,000 a season, with the Eels.

Much to their frustration, the Eels have been forced to cover the seven-figure sum after QBE rejected any insurance payout last month by deeming Watmough’s injury as pre-existing.

media_camera Anthony Watmough is prepared to train in pre-season to receive payment for 2018 season. Picture: Brett Costello

However, much to the 33-year-old’s surprise, he received a letter from Eels management stating their desire to pay him a lump-sum payment prior to October 31 — but not the full amount of around $1.2 million.

The dispute arises over the final year of Watmough’s contract.

The Eels have paid him in full for the 2016 and 2017 seasons but don’t believe they should pay him for the 2018 season because that is an option year.

“(The option to play) was in his favour but the terms could not be performed,” Donnelly said. “It’s not like he can exercise his option to play. He can’t play.”

Watmough has told close friends he will challenge Parramatta’s bid, even if it means returning to training in order to force the Eels to pay him.

That would be disastrous for the Eels and the NRL’s controversial career-ending insurance scheme, as Watmough’s remaining 2017 and 2018 contract money would then be immediately added to the club’s salary cap.

media_camera Anthony Watmough’s career ended prematurely because of injury.

At this stage, any payout due to a career-ending injury has no impact on the club’s salary cap.

But it would immediately become a cap issue if Watmough carried through his threat, although the more likely outcome is a costly and lengthy legal case.

Having secured the likes of South Sydney’s Nathan Brown, Manly’s Sosaia Vave and Penrith’s George Jennings for 2017, the Eels simply haven’t budgeted for Watmough’s extra $1.2 million being added to their cap.

The drama is yet another issue for the Eels to clean up following the club’s most tumultuous season in their history.

Parramatta were stripped of 12-competition points due to a string of salary cap breaches.